Bandwidth Inc.

Notes to Condensed Consolidated Financial Statements

1. Description of Business and Summary of Significant Accounting Policies

Description of Business

Bandwidth Inc. (together with its subsidiaries, “Bandwidth” or the “Company”) was founded in July 2000 and incorporated in Delaware on March 29, 2001. The Company’s headquarters are located in Raleigh, North Carolina. The Company is a global cloud-based, software-powered communications platform-as-a-service (“CPaaS”) provider that enables enterprises to create, scale and operate voice or messaging communications services across any mobile application or connected device.

Basis of Presentation

The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with generally accepted accounting principles in the United States of America (“GAAP”) and applicable rules and regulations of the U.S. Securities and Exchange Commission (the “SEC”) regarding interim financial reporting. Certain information and disclosures normally included in the financial statements prepared in accordance with GAAP have been condensed or omitted pursuant to such rules and regulations. Therefore, these unaudited condensed consolidated financial statements should be read in conjunction with the audited consolidated financial statements and notes included in the Company’s Annual Report on Form 10-K, filed with the SEC on February 19, 2026.

The condensed consolidated balance sheet as of December 31, 2025, included herein, was derived from the audited financial statements as of that date, but does not include all disclosures, including certain notes required by GAAP on an annual reporting basis.

In the opinion of management, the accompanying unaudited condensed consolidated financial statements reflect all normal recurring adjustments necessary to present fairly the financial position, results of operations, comprehensive income (loss) and cash flows for the interim periods, but are not necessarily indicative of the results of operations to be anticipated for the full year 2026 or any future period.

Principles of Consolidation

The condensed consolidated financial statements include the accounts of Bandwidth Inc. and its wholly owned subsidiaries. All intercompany accounts and transactions have been eliminated in consolidation.

Use of Estimates

The preparation of the Company’s condensed consolidated financial statements in conformity with GAAP requires the Company to make estimates and judgments that affect the amounts reported in these financial statements and accompanying notes. These estimates in the condensed consolidated financial statements include, but are not limited to, allowance for expected credit losses, reserve for sales credits, recoverability of long lived and intangible assets, fair value of acquired intangible assets and goodwill, discount rates used in the valuation of right-of-use assets and lease liabilities, the fair value of the liability of the Company’s Convertible Notes (as defined herein), estimated period of benefit, valuation allowances on deferred tax assets, certain accrued expenses and contingencies. Although the Company believes that the estimates it uses are reasonable, due to the inherent uncertainty involved in making these estimates, actual results reported in future periods could differ from those estimates.

The Company has achieved significant progress in realizing its strategic objective of providing a single, universal cloud platform to all global customers (the “Universal Platform”). Consequently, during the first quarter of 2026, the Company adjusted the remaining estimated useful life of the developed technology acquired in 2020 from 5 years to 2 years. This adjustment reflects the accelerated migration of customers to the Universal Platform. The change in estimate, which is accounted for prospectively, resulted in a $2.9 million and $8.9 million increase to amortization expense, respectively, for the three and nine months ended September 30, 2026. It also caused a decrease to basic net income per share of $0.07 and $0.21, respectively, and a decrease to diluted net income per share of $0.05 and $0.18, respectively, for the three and nine months ended September 30, 2026. See Note 5,“Goodwill and Intangible Assets,” to thecondensed consolidated financial statements, for additional details on the Company’s intangible assets.

Marketable Securities

The Company classifies marketable securities as available-for-sale at the time of purchase and reevaluates such classification as of each balance sheet date. The Company may sell these securities at any time for use in current operations even if they have not yet reached maturity. As a result, the Company classifies investments with maturities greater than 90 days as marketable securities in the accompanying condensed consolidated balance sheets. The Company evaluates its investments to assess whether the amortized cost basis is in excess of estimated fair value and determines what amount of that difference, if any, is caused by expected credit losses. Allowance for credit losses is recognized as a charge in other income (expense), net on the condensed consolidated statements of operations, and any remaining unrealized losses are included in accumulated other comprehensive loss on the condensed consolidated balance sheets. Due to the nature and investment grade of the Company’s marketable securities, there were no credit losses recorded for the three and nine months ended September 30, 2026. There have been no impairment charges for any unrealized losses during the period.

Accounts Receivable and Current Expected Credit Losses

Accounts receivable are stated at realizable value, net of allowance for expected credit losses. The allowance for expected credit losses is based on management’s assessment of the collectability of its customer accounts. The Company regularly reviews the composition of the accounts receivable aging, historical credit losses, changes in payment patterns, customer creditworthiness, current economic trends, and reasonable and supportable forecasts about the future. Relevant risk characteristics include customer size and historical loss patterns. Management has evaluated the expected credit losses related to trade accounts receivable and determined that an allowance of approximately $0.7 million and $0.5 million for uncollectible accounts and customer balances that are disputed was required as of September 30, 2026 and December 31, 2025, respectively. Refer to Note 3, “Financial Statement Components” to these condensed consolidated financial statements, for a rollforward of the components of the allowance for the three and nine months ended September 30, 2026 and 2025.

The Company includes unbilled receivables in its accounts receivable balance. Generally, these receivables represent earned revenue from services provided to customers, which will be billed in the next billing cycle. As of September 30, 2026 and December 31, 2025, unbilled receivables were $71.3 million and $57.4 million, respectively.

Concentration of Credit Risk

Financial instruments that are exposed to concentration of credit risk consist primarily of cash and cash equivalents, marketable securities and trade accounts receivable. The Company maintains its cash, cash equivalents and marketable securities with high credit-quality financial institutions. Certain balances held by such financial institutions exceed insured limits.

With regard to customers, credit evaluation and account monitoring procedures are used to minimize the risk of loss. The Company believes that no additional credit risk beyond amounts provided for by the allowance for expected credit losses are inherent in accounts receivable. As of September 30, 2026 and December 31, 2025, no individual customer represented more than 10% of the Company’s accounts receivable, net of allowance.

For the three and nine months ended September 30, 2026 and 2025, no individual customer represented more than 10% of the Company’s revenue.

Recently Adopted Accounting Standards

In November 2024, the Financial Accounting Standards Board (“FASB”) issued Accounting Standard Update (“ASU”) 2024-04, Debt—Debt with Conversion and Other Options (Subtopic 470-20): Induced Conversions of Convertible Debt Instruments(“ASU 2024-04”), which provides additional guidance to stakeholders about how to determine whether a settlement of convertible debt (particularly, cash convertible instruments) at terms that differ from the original conversion terms should be accounted for under the induced conversion or extinguishment guidance. The Company adopted ASU 2024-04 effective January 1, 2026 and applied the guidance prospectively. The adoption had no impact on the Company’s financial position or results of operations.

In July 2025, the FASB issued ASU 2025-05, Financial Instruments—Credit Losses (Topic 326): Measurement of Credit Losses for Accounts Receivable and Contract Assets (“ASU 2025-05”), which provides a practical expedient for the estimation of expected credit losses for current accounts receivable and current contract assets under ASC 606. The practical expedient election assumes that current conditions as of the balance sheet date do not change for the remaining life of the asset. The Company adopted ASU 2025-05 effective January 1, 2026 and elected the practical expedient. ASU 2025-05 did not have a material impact on the Company's financial position or results of operations.

Recent Accounting Pronouncements Not Yet Adopted

In November 2024, the FASB issued ASU 2024-03, Income Statement—Reporting Comprehensive Income—Expense Disaggregation Disclosures (Subtopic 220-40): Disaggregation of Income Statement Expenses (“ASU 2024-03”), which requires public entities to disclose disaggregated information about certain costs and expenses on an interim and annual basis. ASU 2024-03 is effective for fiscal years beginning after December 15, 2026, and interim periods within fiscal years beginning after December 15, 2027, with the option to apply the guidance prospectively or retrospectively. Early adoption is permitted. The Company is currently evaluating the impact of adopting ASU 2024-03 on its consolidated financial statements.

In September 2025, the FASB issued ASU 2025-06, Intangibles—Goodwill and Other—Internal-Use Software (Subtopic 350-40): Targeted Improvements to the Accounting for Internal-Use Software(“ASU 2025-06”), which amends certain aspects of the accounting for and disclosure of software costs under ASC 350-40. The guidance removes all references to project stages throughout ASC 350-40 and clarifies the threshold entities apply to begin capitalizing costs. ASU 2025-06 is effective for annual reporting periods beginning after December 15, 2027, and interim reporting periods within those annual reporting periods, with the option to apply the guidance prospectively, retrospectively, or via a modified prospective transition method. Early adoption is permitted. The Company is currently evaluating the impact of adopting ASU 2025-06 on its consolidated financial statements.

2. Fair Value Measurements

The Company uses a three-tier fair value hierarchy to classify and disclose all assets and liabilities measured at fair value on a recurring basis, as well as assets and liabilities measured at fair value on a non-recurring basis, in periods subsequent to their initial measurement. The hierarchy requires use of observable inputs when available, and to minimize the use of unobservable inputs when determining fair value. The three tiers are defined as follows:

•Level 1. Observable inputs based on unadjusted quoted prices in active markets for identical assets or liabilities;

•Level 2. Inputs, other than quoted prices in active markets, that are observable either directly or indirectly; and

•Level 3. Unobservable inputs for which there is little or no market data, which requires the Company to develop its own assumptions.

A financial instrument’s categorization within the valuation hierarchy is based upon the lowest level of input that is significant to the fair value measurement.

The carrying amounts of cash and cash equivalents, accounts receivable, accounts payable and accrued expenses approximate fair value as of September 30, 2026 and December 31, 2025 because of the relatively short duration of these instruments. Marketable securities consist of time deposits and commercial paper not otherwise classified as cash equivalents. All marketable securities are considered to be available-for-sale and are recorded at their estimated fair values. Unrealized gains and losses for available-for-sale securities are recorded in accumulated other comprehensive loss.

The Company evaluated its financial assets and liabilities subject to fair value measurements on a recurring basis to determine the appropriate level in which to classify them for each reporting period. The following tables summarize the Company’s financial assets measured at fair value as of September 30, 2026 and December 31, 2025:

The Company classifies its marketable securities as current assets as they are available for current operating needs. The following table summarizes the contractual maturities of marketable securities as of September 30, 2026:

As of September 30, 2026, the marketable securities were in an unrealized gain position. The Company has determined that (i) it does not have the intent to sell any of these investments and (ii) it is not more likely than not that it will be required to sell any of these investments before recovery of the entire amortized cost basis. As of September 30, 2026, the Company anticipates that it will recover the entire amortized cost basis of its marketable securities before maturity.

During the three and nine months ended September 30, 2026, there were $1.0 million and $11.4 million, respectively, in maturities of marketable securities. During the three and nine months ended September 30, 2025, there were $2.9 million and $7.7 million, respectively, in maturities of marketable securities. There wereno proceeds from sales of marketable securities for the three and nine months ended September 30, 2026 and 2025. The Company determines realized gains and losses on sale of marketable securities using the specific identification method and records such gains and losses in other income (expense), net on the condensed consolidated statements of operations.

As of September 30, 2026, the fair value of the 2028 Convertible Notes and 2032 Convertible Notes was approximately $6.4 million and $352.6 million, respectively. As of December 31, 2025, the fair value of the 2026 Convertible Notes and the 2028 Convertible Notes was approximately $7.5 million and $219.7 million, respectively. The fair value was determined based on the closing price for the Convertible Notes on the last trading day of the reporting period and is considered as Level 2 in the fair value hierarchy. See Note 7, “Debt,” to the condensed consolidated financial statements for additional information regarding the Convertible Notes.

3. Financial Statement Components

Accounts receivable, net of allowance consists of the following:

Components of the allowance for expected credit losses are as follows:

(1) Write-off of uncollectible accounts after exhaustion of collection efforts.

Accrued expenses and other current liabilities consisted of the following:

4. Property, Plant and Equipment

Property, plant and equipment, net consisted of the following:

The Company capitalized $2.0 million and $6.6 million of software development costs for the three and nine months ended September 30, 2026, respectively, and $2.7 million and $8.1 million for the three and nine months ended September 30, 2025, respectively.

Amortization expense related to capitalized software development costs was $2.3 million and $6.5 million for the three and nine months ended September 30, 2026, respectively, and $1.9 million and $5.0 million for the three and nine months ended September 30, 2025, respectively.

The Company recognized depreciation expense, which includes amortization of capitalized software development costs, as follows:

5. Goodwill and Intangible Assets

Goodwill

The change in carrying amount of goodwill was as follows:

Intangible Assets

Intangible assets, net consisted of the following:

The Company recognized amortization expense as follows:

The remaining weighted average amortization period for definite lived intangible assets is 7.4 years.

Future estimated amortization expense for definite lived intangible assets is as follows:

6. Leases

The Company primarily leases facilities for office space under non-cancelable operating leases for its U.S. and international locations. As of September 30, 2026, non-cancelable leases expire on various dates between 2026 and 2043, some of which include options to extend the leases for up to 20 years.

On January 1, 2025, the Company commenced a sublease of a portion of its corporate headquarters to Relay, Inc., a related party (“Relay”). The sublease expires on December 31, 2029 and does not include any option to renew or purchase, nor does it include any residual value guarantees. Effective July 1, 2026, the Company and Relay amended the sublease to expand the subleased space at the previously agreed-upon rates, with the term unchanged. As of September 30, 2026, total future minimum rent payments to the Company under this sublease were$10.9 million.

The components of operating lease expense recorded in the condensed consolidated statements of operations were as follows:

Other supplemental information related to operating leases were as follows:

Maturities of operating lease liabilities were as follows:

7. Debt

Revolving Credit Facility

The Company maintains a revolving credit facility (the“Credit Facility”) under a credit agreement with Bank of America, N.A., as administrative agent, as amended (the“Credit Agreement”), providing for borrowings of up to$150.0 million, including a$15.0 million sublimit for letters of credit and a$10.0 million swingline subfacility. The Credit Facility matures on the earlier of (a) May 1, 2029 or (b) the date that is 91 days prior to the scheduled maturity date or mandatory conversion date of the Company’s outstanding 2028 Convertible Notes. Borrowings under the Credit Facility bear interest, at the Company’s election, based on a base rate or the Secured Overnight Financing Rate (“SOFR”), plus an applicable margin, and the Company pays a quarterly commitment fee on the unused portion of the Credit Facility, in each case, based on the Company’s consolidated total leverage ratio. The Credit Agreement contains financial covenants requiring the Company to maintain a maximum consolidated senior secured leverage ratio and a minimum consolidated fixed charge coverage ratio, and the Credit Facility is secured by substantially all of the assets of the Company and its domestic subsidiaries. See Note 7,“Debt,” in the Company’s Annual Report on Form 10-K filed with the SEC on February 19, 2026, for further information regarding the terms of the Credit Facility.

As of September 30, 2026, unamortized debt issuance costs related to the Credit Facility were $0.5 million, of which $0.3 million were included in prepaid expenses and other current assets and $0.2 million were included in other long-term assets. As of December 31, 2025, unamortized debt issuance costs were $0.7 million, of which $0.2 million were included in prepaid expenses and other current assets and $0.5 million were included in other long-term assets.

As of September 30, 2026, the Company hadno outstanding borrowings under the Credit Facility and was in compliance with all financial and non-financial covenants for all periods presented. As of September 30, 2026, the available borrowing capacity under the Credit Facility was $150.0 million.

On July 25, 2026, the Company entered into a third amendment to the Credit Agreement to increase the aggregate amount of certain restricted payments the Company is permitted to make in any fiscal year from $20.0 million to $40.0 million, or if greater,20% of TTM consolidated EBITDA, subject to the Company maintaining a pro forma consolidated senior secured leverage ratio at least 0.50 to 1.00 inside the maximum then-applicable consolidated senior secured leverage ratio covenant.

On October 26, 2026, the Company entered into a fourth amendment to the Credit Agreement (the “Fourth Amendment”) to, among other things, (i) increase the aggregate revolving credit commitments under the Credit Facility from $150.0 million to $200.0 million, (ii) extend the maturity date of the Credit Facility to October 26, 2031, (iii) delete the term “SOFR Adjustment” and all references thereto from the Credit Agreement, and (iv) increase the basket in Section 7.01(e) of the Credit Agreement from the greater of $5.0 million and 10% of TTM consolidated EBITDA to the greater of $10.0 million and 10% of TTM consolidated EBITDA.

Convertible Senior Notes and Capped Call Transactions

2026 Convertible Notes

In February 2020, the Company issued $400.0 million aggregate principal amount of 0.25% Convertible Notes due 2026 (the “2026 Convertible Notes”). The 2026 Convertible Notes matured on March 1, 2026, at which time the Company paid the remaining$7.6 million outstanding principal and accrued interest in cash to settle the 2026 Convertible Notes in full. No 2026 Convertible Notes remain outstanding.

2028 Convertible Notes

In March 2021, the Company issued $250.0 million aggregate principal amount of 0.50% Convertible Notes due 2028 (the “2028 Convertible Notes”), which mature on April 1, 2028 unless earlier repurchased, redeemed, or converted. Each $1,000 principal amount is initially convertible into 5.5781 shares of the Company's Class A common stock, equivalent to an initial conversion price of approximately $179.27 per share. See Note 7,“Debt,” in the Company’s Annual Report on Form 10-K filed with the SEC on February 19, 2026, forfurther information regarding the terms of the 2028 Convertible Notes, including redemption, conversion, and fundamental change provisions.

During the first half of 2026, the Company entered into separate, privately negotiated repurchase agreements with a limited number of holders of the 2028 Convertible Notes to repurchase approximately $222.5 million aggregate principal amount of the 2028 Convertible Notes for an aggregate cash price of approximately $208.5 million (the “Privately Negotiated Repurchases”). The Privately Negotiated Repurchases closed on March 4, 2026 and June 18, 2026, respectively.

During August 2026, the Company repurchased approximately$20.8 million aggregate principal amount of the 2028 Convertible Notes in open market transactions (the “Open Market Repurchases”) for an aggregate cash price of approximately$19.9 million. The Open Market Repurchases closed on August 4, 2026. The difference between the consideration used for the Open Market Repurchases and the carrying value of the 2028 Convertible Notes resulted in a gain on extinguishment of debt of$0.8 million for the three months ended September 30, 2026.

In the aggregate, the Privately Negotiated Repurchases and Open Market Repurchases resulted in a gain of $13.2 million on the extinguishment of debt recorded within net gain on extinguishment of debt on the Company’s condensed consolidated statements of operations for the nine months ended September 30, 2026. Following the Privately Negotiated Repurchases and Open Market Repurchases, approximately $6.7 million aggregate principal amount of the 2028 Convertible Notes remains outstanding. The capped call transactions entered into in connection with the 2028 Convertible Notes remain in effect notwithstanding the repurchases.

During the three and nine months ended September 30, 2026, the conditions allowing the holders of the 2028 Convertible Notes to convert were not met.

2032 Convertible Notes

On June 18, 2026, the Company issued $316.3 million aggregate principal amount of 0% Convertible Notes due July 1, 2032 in a private placement to qualified institutional buyers pursuant to Rule 144A under the Securities Act (the “2032 Convertible Notes” and, together with the 2028 Convertibles Notes, the “Convertible Notes”). The notes will not bear regular interest, and the principal amount will not accrete.

The 2032 Convertible Notes may bear special interest under specified circumstances relating to the Company’s failure to comply with its reporting obligations under the indenture governing the 2032 Convertible Notes (the “2032 Indenture”) or additional interest if the 2032 Convertible Notes are not freely tradeable as required by the 2032 Indenture. The 2032 Convertible Notes will mature on July 1, 2032, unless earlier repurchased, redeemed by the Company, or converted pursuant to their terms. The total net proceeds from the 2032 Convertible Notes, after deducting initial purchaser discounts, costs related to the 2032 Capped Calls (as defined herein), and debt issuance costs, paid by the Company, were approximately $281.5 million.

Each $1,000.0 principal amount of the 2032 Convertible Notes is initially convertible into 13.7663 shares of the Company’s Class A common stock, par value $0.001 per share, which is equivalent to an initial conversion price of approximately $72.64 per share. The conversion rate is subject to adjustment upon the occurrence of certain specified events as set forth in the 2032 Indenture. In addition, upon the occurrence of a make-whole fundamental change, as defined in the 2032 Indenture, the Company will, in certain circumstances, increase the conversion rate by a number of additional shares for a holder that elects to convert its 2032 Convertible Notes in connection with such make-whole fundamental change or during the relevant redemption period.

The notes are the senior, unsecured obligations of the Company and are equal in right of payment with the Company’s existing and future senior unsecured indebtedness, including the 2028 Convertible Notes, senior in right of payment to the Company’s existing and future indebtedness that is expressly subordinated to the notes and effectively subordinated to the Company’s existing and future senior secured indebtedness (including the Credit Agreement), to the extent of the value of the collateral securing that indebtedness. The notes will be structurally subordinated to all existing and future indebtedness and other liabilities, including trade payables, and (to the extent the Company is not a holder thereof) preferred equity, if any, of the Company’s subsidiaries.

The 2032 Convertible Notes will be redeemable in whole or in part (subject to certain limitations) at the Company’s option on or after July 6, 2029, but before the fortieth (40 th) scheduled trading day before the maturity date, at a cash redemption price equal to 100% of the principal amount of the 2032 Convertible Notes to be redeemed, plus accrued and unpaid special and additional interest, if any, if the last reported sale price of the Class A common stock has been at least 130% of the conversion price then in effect for at least 20 trading days (whether or not consecutive) during any 30 consecutive trading days ending on, and including, the trading day immediately before the date the redemption notices were sent; and the trading day immediately before such notices were sent and certain other conditions are satisfied. In addition, the Company may redeem for cash all, but not less than all, of the 2032 Convertible Notes at any time if the amount of the 2032 Convertible Notes that remains outstanding at such time is less than 15% of the aggregate principal amount of the 2032 Convertible Notes initially issued under the 2032 Indenture, at a cash redemption price equal to 100% of the principal amount thereof, plus accrued and unpaid special and additional interest, if any, to, but excluding, the redemption date.

Holders may convert their notes at their option in the following circumstances:

1. during any calendar quarter commencing after the calendar quarter ending on September 30, 2026 (and only during such calendar quarter), if the last reported sale price per share of the Company’s Class A common stock exceeds (x) before July 1, 2031,150% and (y) on or after July 1, 2031,130%, in each case, of the conversion price for each of at least 20 trading days, whether or not consecutive, during the 30 consecutive trading days ending on, and including, the last trading day of the immediately preceding calendar quarter;

2. during thefive consecutive business days immediately after any 10 consecutive trading day period (such 10 consecutive trading day period, the “measurement period”) in which the trading price per $1,000.0 principal amount of 2032 Convertible Notes for each trading day of the measurement period was less than 98% of the product of the last reported sale price per share of the Company’s Class A common stock on such trading day and the conversion rate on such trading day;

3. upon the occurrence of certain corporate events or distributions on the Company’s Class A common stock, as described in the 2032 Indenture;

4. if the Company calls such 2032 Convertible Notes for redemption; and

5. at any time from, and including, April 1, 2032 until the close of business on the second scheduled trading day immediately before the maturity date.

Upon conversion, the Company will pay or deliver, as the case may be, cash, shares of Class A common stock, or a combination of cash and shares of Class A common stock, at the Company's election.

As of September 30, 2026, the 2032 Convertible Notes are classified as a long-term liability in the accompanying condensed consolidated balance sheets, based on contractual settlement provisions. The transaction costs of $12.9 million related to the 2032 Convertible Notes are accounted for as debt issuance costs that will be amortized to interest expense using the effective interest method over the contractual terms of the 2032 Convertible Notes at an annual effective interest rate of 0.688%.

The net carrying amount of the Convertible Notes were as follows:

Capped Calls

In connection with the offering of the 2026 Convertible Notes, the 2028 Convertible Notes, and the 2032 Convertible Notes, the Company entered into privately negotiated capped call transactions with certain counterparties (the “2026 Capped Calls”, the “2028 Capped Calls” and the “2032 Capped Calls,” respectively and, collectively, the “Capped Calls”). The initial strike price of the Capped Calls corresponds to the initial conversion price of the 2026 Convertible Notes, the 2028 Convertible Notes or the 2032 Convertible Notes, as applicable. The Capped Calls are generally intended to reduce or offset the potential dilution to the Class A common stock upon any conversion of the 2026 Convertible Notes, the 2028 Convertible Notes and the 2032 Convertible Notes with such reduction or offset, as the case may be, subject to a cap. On March 1, 2026, the 2026 Capped Calls expired, concurrently with the full settlement and satisfaction of the 2026 Convertible Notes. The 2028 Capped Calls and the 2032 Capped Calls remain outstanding as of September 30, 2026. The 2028 Capped Calls and the 2032 Capped Calls expire on April 1, 2028 and July 1, 2032, respectively, subject to earlier exercise or termination. The 2028 Capped Calls and the 2032 Capped Calls are subject to either adjustment or termination upon the occurrence of specified extraordinary events affecting the Company, including a merger event, a tender offer, and a nationalization, insolvency or delisting involving the Company. In addition, the 2028 Capped Calls and the 2032 Capped Calls are subject to certain specified additional disruption events that may give rise to a termination of the 2028 Capped Calls and the 2032 Capped Calls, including changes in law, insolvency filings, and hedging disruptions. The Capped Call transactions are recorded in stockholders’ equity and are not accounted for as derivatives. The net cost to purchase the Capped Calls was recorded as a reduction to additional paid-in capital in the accompanying condensed consolidated balance sheets.

The following table sets forth key terms and costs incurred for the Capped Calls related to the Convertible Notes as of September 30, 2026:

8. Revenue and Geographic Information

Revenue

The following table summarizes the Company’s revenue by geographic region, which is apportioned based on the destination of the service:

For the three and nine months ended September 30, 2026 and 2025, no country outside of the United States represented 10% or more of the Company’s total revenues.

Remaining Performance Obligations

Revenue allocated to remaining performance obligations consists entirely of deferred revenue. The Company applies the optional exemption of not disclosing the transaction price allocated to the remaining performance obligations for its usage-based contracts and contracts with original duration of less than one year.

Contract Assets and Liabilities

The following table provides information about receivables and contract liabilities from contracts with customers:

(1) Included in accounts receivable, net of allowance on the condensed consolidated balance sheets.

(2) Included in current portion of deferred revenue and deferred revenue, net of current portion on the condensed consolidated balance sheets.

Deferred revenue is recorded when cash payments are received in advance of future usage on contracts. Revenue is typically recognized in the following month when service is rendered or, in the case of nonrefundable upfront fees, over the estimated period of benefit from the date the fee is incurred by the customer. Customer refundable payments are recorded as customer deposits. During the three and nine months ended September 30, 2026, the Company recognized revenue of $1.9 million and $6.5 million, respectively, that was included in the deferred revenue balances at the beginning of the year. The Company expects to recognize $8.5 million in revenue over the next 12 months related to its contract liabilities as of September 30, 2026.

Long-lived Assets

The following table summarizes the Company’s long-lived assets by geographic region:

9. Stockholders’ Equity

Common Stock

The Company had reserved shares of Class A common stock for issuance under stock-based award agreements as follows:

Share Repurchase Program

On February 19, 2026, the Company’s Board of Directors authorized a share repurchase program of up to $80.0 million of the Company’s outstanding Class A common stock, subject to market conditions, contractual restrictions and other factors. Under the share repurchase program, the Company may purchase shares from time to time at the discretion of management through open market purchases, block trades, accelerated or other structured share repurchase programs, privately negotiated transactions, Rule 10b5-1 plans or other means. Open market repurchases will be structured to occur in accordance with applicable federal securities laws, including within the pricing and volume requirements of Rule 10b-18 under the Securities Exchange Act of 1934, as amended. The manner, timing, pricing and amount of any transactions will be subject to the discretion of management and may be based upon market conditions, regulatory requirements and alternative opportunities that the Company may have for the use or investment of its capital. The program does not obligate the Company to acquire any particular amount of Class A common stock, and the program may be extended, modified, suspended or terminated at any time at the Company’s discretion.

The following table summarizes the Company’s share repurchase activity under its share repurchase program:

(1) Excludes transaction costs and excise tax associated with the repurchase, if any.

As of September 30, 2026, approximately $50.0 million remained available for repurchases under the share repurchase program.

10. Stock-Based Compensation

Restricted Stock Units

The following summarizes the restricted stock unit (“RSU”) activity for the nine months ended September 30, 2026:

As of September 30, 2026, total unrecognized compensation cost related to non-vested RSUs was $52.1 million, which will be amortized over a weighted-average period of 1.91 years.

Stock-Based Compensation Expense

The Company recognized total stock-based compensation expense as follows:

11. Commitments and Contingencies

Operating Leases

The Company leases office space under non-cancelable operating lease agreements that expire on various dates through July 2043. As of September 30, 2026, the Company has$435.2 millionin future minimum rent payments for its office space.

Contractual Obligations

As of September 30, 2026, the Company has $25.4 million in non-cancellable purchase obligations, consisting of primarily network equipment maintenance and software license contracts, of which $12.4 million will be fulfilled within one year.

Legal Matters

The Company is subject to certain legal proceedings described below, and from time to time may be subject to legal matters arising in the ordinary course of business. Where it is determined that a loss is probable and estimable in a given matter, the Company establishes an accrual. Any amounts accrued as of the balance sheet date are not material in any of the currently pending matters. In management’s opinion, the Company does not expect that the ultimate resolution of any currently pending legal matter in future periods will have a material effect on our financial condition, but could have a material effect on our results of operations for a given reporting period.

On July 10, 2025, the City and County of San Francisco Tax Collector (“City of San Francisco”) issued a Corrected Tax Collector Decision on Petition for Redetermination to Bandwidth, asserting an Access Line Tax (“ALT”) deficiency in the amount of $3.8 million. The Company disputes the City of San Francisco’s application of the ALT to Bandwidth as well as the amount of the deficiency. On July 25, 2025, the Company paid and placed on deposit the amount under protest, as required by law. On August 7, 2025, Bandwidth filed a Claim for Refund with the City of San Francisco seeking a refund of the full amount. The Company to date has been unable to resolve the Claim for Refund with the City of San Francisco, and on December 31, 2025 the Company filed a Complaint for Refund challenging the assessment in the Superior Court of the State of California. The City of San Francisco answered the Complaint for Refund on March 27, 2026. The Company believes it has meritorious arguments that support a refund of the full amount.

The Company is also involved as a defendant in a lawsuit alleging that the Company failed to bill, collect and remit certain taxes and surcharges associated with the provision of 911 services in Cook and Kane Counties, Illinois, the City of Chicago, Illinois, and the State of Illinois. The Company intends to vigorously defend this lawsuit and believes that it has meritorious defenses.

12. Segment Information

The Company manages its business activities on a consolidated basis and operates inone operating segment. Operating segments are defined as components of an enterprise for which separate financial information is available and evaluated regularly by the Chief Operating Decision Maker (the “CODM”) in deciding how to make operating decisions, allocate resources and in assessing performance. The Company’s CODM is its Chief Executive Officer. The CODM utilizes the Company’s budgeted and forecasted expense information as a key input to resource allocation. The CODM makes decisions on resource allocation, assesses performance of the business and monitors budget versus actual results using net income (loss), as reported in the accompanying condensed consolidated statements of operations.

Significant expenses within net income (loss) include cost of revenue, research and development, sales and marketing, and general and administrative expenses, which are each separately presented on the Company’s condensed consolidated statements of operations. Other segment items within net income (loss) include net gain on extinguishment of debt, interest expense, net, other income (expense), net and income tax benefit.

13. Income Taxes

At the end of each interim reporting period, the Company determines the income tax provision by using an estimate of the annual effective tax rate, adjusted for discrete items occurring in the quarter. The effective income tax rate reflects the effect of federal, international, and state income taxes and the permanent impacts of differences in book and tax accounting.

The Company recognized an income tax benefit of $1.9 million and $6.2 million for the three and nine months ended September 30, 2026, respectively, compared with an income tax benefit of $2.3 million and $2.2 million for the three and nine months ended September 30, 2025, respectively. The effective tax rate was (56.9)% and (112.4)% for the three and nine months ended September 30, 2026, respectively, compared with 64.8% and

18.3% for the three and nine months ended September 30, 2025, respectively. The Company’s effective tax rate was negative for the three and nine months ended September 30, 2026 because the Company recorded an income tax benefit on consolidated pre-tax income. In the U.S., the valuation allowance against federal and state deferred tax assets limits income tax expense to current state taxes of approximately $0.1 million for the nine months ended September 30, 2026, notwithstanding U.S. pre-tax income. In foreign jurisdictions in which the Company does not maintain a valuation allowance, the Company recorded an income tax benefit on pre-tax losses.

The decrease in the income tax benefit for the three months ended September 30, 2026 as compared with the three months ended September 30, 2025, was primarily attributable to a discrete income tax benefit of approximately $2.0 million recognized in the three months ended September 30, 2025 upon enactment of the One Big Beautiful Bill Act (the “OBBBA”). The income tax benefit increased for the nine months ended September 30, 2026, as compared with the nine months ended September 30, 2025, primarily because of higher pre-tax operating losses outside the U.S. in jurisdictions without a valuation allowance. These increased losses were primarily driven by higher amortization of acquired intangible assets resulting from the first-quarter 2026 change in the remaining useful life of the developed technology acquired in 2020. See Note 1, “Description of Business and Summary of Significant Accounting Policies,” to these condensed consolidated financial statements, for additional information. The Company does not maintain a valuation allowance outside of the U.S. because reversal of existing deferred tax liabilities support realization of the related deferred tax assets.

14. Basic and Diluted Income (Loss) per Common Share

Basic net income (loss) per share is computed by dividing net income (loss) by the weighted-average number of shares of common stock outstanding during the period. Diluted net income (loss) per share is computed by giving effect to all potential shares of common stock, including shares issuable upon conversion of the Company’s convertible senior notes (calculated using the if-converted method), stock options, and unvested RSUs. The Company is in a net loss position for the three and nine months ended September 30, 2025, and therefore diluted shares equals basic shares.

The components of basic and diluted income (loss) per share are as follows:

(1) Net income is adjusted for the reversal of the net gain on extinguishment of debt and add back of interest expense as part of the calculation for diluted earnings per share.

The following common share equivalents were excluded from the weighted average shares used to calculate diluted net income (loss) per common share because their effects would have been anti-dilutive: