Document


UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549 
___________________________________________________

FORM 8-K
___________________________________________________
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
Date of Report (Date of earliest event reported) October 30, 2018 
___________________________________________________
Bandwidth Inc.
(Exact name of registrant as specified in its charter)
___________________________________________________
Delaware
001-38285
56-2242657
(State or other jurisdiction
of incorporation)
(Commission
File Number)
(IRS Employer
Identification No.)

900 Main Campus Drive
Raleigh, NC
27606
(Address of principal executive offices)
(Zip Code)
(800) 808-5150
Registrant’s telephone number, including area code
Not Applicable
(Former name or former address, if changed since last report.)
___________________________________________________
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
 
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).
Emerging growth company    ☒
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.  
   ☐




Item 2.02 Results of Operations and Financial Condition.
On October 30, 2018, Bandwidth Inc. (“Bandwidth”) issued a press release reporting its financial results for the third quarter ended September 30, 2018. A copy of the press release is furnished as Exhibit 99.1 to this Current Report on Form 8-K. The information furnished with this Item 2.02, including Exhibit 99.1, shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, or otherwise subject to the liabilities of that section, nor shall it be deemed incorporated by reference into any filing under the Securities Act of 1933, as amended, except as expressly set forth by specific reference in such a filing.

Item 9.01  Financial Statements and Exhibits.
(d) Exhibits
Exhibit No. Description 
Bandwidth Inc. press release, dated October 30, 2018




SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
 
BANDWIDTH INC. 
Date: October 30, 2018By: /s/ Jeffrey A. Hoffman 
Name: Jeffrey A. Hoffman 
Title: Chief Financial Officer 


Document

Exhibit 99.1
 http://api.tenkwizard.com/cgi/image?quest=1&rid=23&ipage=12519461&doc=3


Bandwidth Announces Third Quarter 2018 Financial Results

Total revenue of $50.5 million, up 22% year-over-year
CPaaS Revenue of $41.5 million, up 24% year-over-year
Active CPaaS Customers of 1,155, up 26% year-over-year
Dollar-based net retention rate of 117%, up from 105% in Q3 2017 

Raleigh, NC - October 30, 2018 - Bandwidth Inc. (NASDAQ: BAND), a software company focused on communications for the enterprise, today announced financial results for the third quarter ended September 30, 2018.
“We continued our trend of surpassing expectations during the third quarter and delivered strong financial results. We grew CPaaS revenue 24% year-over-year and expanded customer relationships evidenced by our 117% dollar-based net retention rate," stated David Morken, chief executive officer of Bandwidth. "We have made excellent progress in bolstering our sales and marketing and technology teams. I am proud of all Bandmates who continue to demonstrate strong execution during this period of accelerated hiring. We are excited to deliver value and modernize communications for our enterprise customers.”
Third Quarter 2018 Financial Highlights
Revenue: Total revenue for the third quarter of 2018 was $50.5 million, up 22% compared to $41.3 million for the third quarter of 2017. Within total revenue, CPaaS revenue was $41.5 million, up 24% compared to $33.4 million for the third quarter of 2017. Other revenue contributed the remaining $8.9 million for the third quarter of 2018. Other revenue was $7.9 million in the same period last year.
Gross Profit: Gross profit for the third quarter of 2018 was $23.0 million, compared to $18.8 million for the third quarter of 2017. Gross margin for the third quarter of 2018 was 46%, compared to 45% for the third quarter of 2017. Non-GAAP gross profit for the third quarter of 2018 was $24.1 million, compared to $19.9 million for the third quarter of 2017. Non-GAAP gross margin was 48% for the third quarter of 2018, compared to 48% for the third quarter of 2017.
Net Income: Net income for the third quarter of 2018 was $2.5 million, or $0.12 per share, based on 21.1 million weighted average diluted shares outstanding. This includes a $4.2 million income tax benefit from option exercises. During the third quarter of 2017, net income attributable to common stockholders was $1.4 million, or $0.11 per share, based on 13.3 million weighted average diluted shares outstanding for the third quarter of 2017.
Non-GAAP Net Income/(Loss): Non-GAAP net loss for the third quarter of 2018 was $(1.0) million, or $(0.05) per share, based on 19.1 million weighted average basic shares outstanding. Non-GAAP net loss excludes the $4.2 million income tax benefit from option exercises. This compares to a Non-GAAP net income of $2.2 million, or $0.15 per share, based on 15.0 million weighted average diluted shares outstanding for the third quarter of 2017.
Adjusted EBITDA: Adjusted EBITDA was $2.3 million for the third quarter of 2018, compared to $5.2 million for the third quarter of 2017.




Additional information regarding the non-GAAP financial measures discussed in this release, including an explanation of these measures and how each are calculated are included below under the heading “Non-GAAP Financial Measures.” A reconciliation of GAAP to non-GAAP financial measures has also been provided in the financial tables included below.
Third Quarter 2018 Key Metrics
The number of active CPaaS customers was 1,155 as of September 30, 2018, an increase of 26% from 918 as of September 30, 2017.
The dollar-based net retention rate was 117% during the third quarter of 2018, compared to 105% during the third quarter of 2017.
Additional information regarding our active CPaaS customers and dollar-based net retention rate and how each are calculated are included below.
Financial Outlook
As of October 30, 2018, Bandwidth is providing guidance for its fourth quarter and full year 2018 as follows:
Fourth Quarter 2018 Guidance: CPaaS revenue is expected to be in the range of $42.1 million to $42.6 million. Total revenue is expected to be in the range of $49.1 million to $49.6 million. Non-GAAP earnings per share is expected to be a loss in the range of ($0.28) to ($0.30) per share, using 19.4 million weighted average basic shares outstanding.
Full Year 2018 Guidance: CPaaS revenue is expected to be in the range of $162.3 million to $162.8 million. Total revenue is expected to be in the range of $200.8 million to $201.3 million.  Non-GAAP earnings per share is expected to be in the range of approximately of $0.19 to $0.21 per share, using 21.1 million weighted average diluted shares outstanding.
Bandwidth has not reconciled its fourth quarter and full-year guidance related to non-GAAP net income (loss) to GAAP net income and non-GAAP earnings (loss) per share to GAAP earnings (loss), because stock-based compensation cannot be reasonably calculated or predicted at this time. Accordingly, a reconciliation is not available without unreasonable effort.
Quarterly Conference Call
Bandwidth will host a conference call today at 5:00 p.m. Eastern Time to review the Company’s financial results for the third quarter ended September 30, 2018. To access this call, dial (877) 407-0792 for the U.S. or Canada, or (201) 689-8263 for international callers. A live webcast of the conference call will be accessible from the Investors section of Bandwidth’s website at https://investors.bandwidth.com, and a recording will be archived and accessible at https://investors.bandwidth.com. An audio replay of this conference call will also be available through  November 6, 2018, by dialing (844) 512-2921 for the U.S. or Canada, or (412) 317-6671 for international callers, and entering passcode 13683930.
About Bandwidth Inc.
Bandwidth (NASDAQ: BAND) is a software company focused on communications for the enterprise. Companies like Google, Microsoft, and Ring Central use Bandwidth’s APIs to easily embed voice, messaging and 9-1-1 access into software and applications. Bandwidth is the first and only CPaaS provider offering a robust selection of communications APIs built around their own nationwide IP voice network- one of the largest in the nation. More information available at www.bandwidth.com.




Forward-Looking Statements
This press release includes forward-looking statements. All statements contained in this press release other than statements of historical facts, including, without limitation, statements regarding our future financial and business performance for the fourth quarter 2018 and full-year 2018, attractiveness of our product offerings and platform and the value proposition of our products, are forward-looking statements. The words “anticipate,” “believe,” “continue,” “estimate,” “expect,” “intend,” “guide,” “may,” “will” and similar expressions and their negatives are intended to identify forward-looking statements. We have based these forward-looking statements largely on our current expectations and projections about future events and financial trends that we believe may affect our financial condition, results of operations, business strategy, short-term and long-term business operations and objectives and financial needs. These forward-looking statements are subject to a number of risks and uncertainties, including, without limitation, risks related to our rapid growth and ability to sustain our revenue growth rate, competition in the markets in which we operate, market growth, our ability to innovate and manage our growth, our ability to expand effectively into new markets, our ability to operate in compliance with applicable laws as well as other risks and uncertainties set forth in the “Risk Factors” section of our prospectus related to the initial public offering (IPO), filed with the Securities and Exchange Commission pursuant to Rule 424(b)(4) under the Securities Act of 1933, as amended, on November 13, 2017 and subsequent reports that we file with the Securities and Exchange Commission. Moreover, we operate in a very competitive and rapidly changing environment. New risks emerge from time to time. It is not possible for our management to predict all risks, nor can we assess the impact of all factors on our business or the extent to which any factor, or combination of factors, may cause actual results to differ materially from those contained in any forward-looking statements we may make. In light of these risks, uncertainties and assumptions, we cannot guarantee future results, levels of activity, performance, achievements or events and circumstances reflected in the forward-looking statements will occur. We are under no obligation to update any of these forward-looking statements after the date of this press release to conform these statements to actual results or revised expectations, except as required by law. You should, therefore, not rely on these forward-looking statements as representing our views as of any date subsequent to the date of this press release.
Non-GAAP Financial Measures
To supplement our consolidated financial statements, which are prepared and presented in accordance with Generally Accepted Accounting Principles in the United States, or GAAP, we provide investors with certain non-GAAP financial measures and other business metrics, which we believe are helpful to our investors. We use these Non-GAAP financial measures and other business metrics for financial and operational decision-making purposes and as a means to evaluate period-to-period comparisons. We believe that these Non-GAAP financial measures and other business metrics provide useful information about our operating results, enhance the overall understanding of past financial performance and future prospects and allow for greater transparency with respect to metrics used by our management in its financial and operational decision-making.
The presentation of Non-GAAP financial information and other business metrics is not meant to be considered in isolation or as a substitute for the directly comparable financial measures prepared in accordance with GAAP. While our Non-GAAP financial measures and other business metrics are an important tool for financial and operational decision-making and for evaluating our own operating results over different periods of time, we urge investors to review the reconciliation of these financial measures to the comparable GAAP financial measures included above, and not to rely on any single financial measure to evaluate our business.
We define Non-GAAP gross profit as gross profit after adding back depreciation and amortization and stock-based compensation. We add back depreciation and amortization and stock-based compensation because they are non-cash items. We eliminate the impact of these non-cash items, because we do not consider them indicative of our core operating performance. Their exclusion facilitates comparisons of our operating performance on a period-to- period basis. Therefore, we believe that showing gross margin, as adjusted to remove the impact of these non- cash expenses, such as depreciation, amortization and stock-based compensation, is helpful to investors in assessing our gross profit and gross margin performance in a way that is similar to how management assesses our performance. We calculate Non-GAAP gross margin by dividing adjusted gross profit by revenue, expressed as a percentage of revenue.



We define Non-GAAP net income (loss) as net income (loss) adjusted for certain items affecting period to period comparability. Non-GAAP net income (loss) excludes stock-based compensation, change in fair value of shareholders’ antidilutive arrangement, amortization of acquired intangible assets related to the Dash acquisition, impairment charges of intangibles assets, loss (gain) on disposal of property and equipment, estimated tax impact of above adjustments, income tax benefit resulting from excess tax benefits associated with the exercise of stock options, benefit resulting from the release of the valuation allowance on our deferred tax assets (“DTA”), and impact on remeasurement of DTA as a result of 2017 tax reform.
We define adjusted EBITDA as net income adjusted to reflect the addition or elimination of certain income statement items including, but not limited to: income tax expense (benefit), interest expense, net, depreciation and amortization expense, stock-based compensation expense, impairment of intangible assets, and loss (gain) from disposal of property and equipment. We have presented Adjusted EBITDA because it is a key measure used by our management and board of directors to understand and evaluate our core operating performance, generate future operating plans, and make strategic decisions regarding the allocation of capital. In particular, we believe that the exclusion of certain items in calculating Adjusted EBITDA can produce a useful measure for period-to-period comparisons of our business.
We define Free Cash Flow as net cash provided by or used in operating activities less net cash used in investments of property, plant and equipment activities and capitalized development costs for software for internal use. We believe free cash flow is a useful indicator of liquidity and provides information to management and investors about the amount of cash generated from our core operations that can be used for investing in our business. Free cash flow has certain limitations in that it does not represent the total increase or decrease in the cash balance for the period, it does not take into consideration investment in long-term securities, nor does it represent the residual cash flows available for discretionary expenditures. Therefore, it is important to evaluate free cash flow along with our condensed consolidated statements of cash flows.
We believe that these Non-GAAP financial measures provide useful information about our operating results, enhance the overall understanding of past financial performance and future prospects and allow for greater transparency with respect to metrics used by our management in its financial and operational decision-making.
While a reconciliation of Non-GAAP guidance measures to corresponding GAAP measures is not available on a forward-looking basis as a result of the uncertainty regarding, and the potential variability of, many of these costs and expenses that we may incur in the future, we have provided a reconciliation of Non-GAAP financial measures and other business metrics to the nearest comparable GAAP measures in the accompanying financial statement tables included in this press release.
We define an active CPaaS customer account at the end of any period as an individual account, as identified by a unique account identifier, for which we have recognized at least $100 of revenue in the last month of the period. We believe that the use of our platform by active CPaaS customer accounts at or above the $100 per month threshold is a stronger indicator of potential future engagement than trial usage of our platform at levels below $100 per month. A single organization may constitute multiple unique active CPaaS customer accounts if it has multiple unique account identifiers, each of which is treated as a separate active CPaaS customer account.
Our dollar-based net retention rate compares the CPaaS revenue from customers in a quarter to the same quarter in the prior year. To calculate the dollar-based net retention rate, we first identify the cohort of customers that generate CPaaS revenue and that were customers in the same quarter of the prior year. The dollar-based net retention rate is obtained by dividing the CPaaS revenue generated from that cohort in a quarter, by the CPaaS revenue generated from that same cohort in the corresponding quarter in the prior year. When we calculate dollar-based net retention rate for periods longer than one quarter, we use the average of the quarterly dollar-based net retention rates for the quarters in such period.





CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND
COMPREHENSIVE INCOME
(In Thousands, Except Share and per Share Amounts)
(unaudited)
Three months ended
September 30, 
Nine months ended
September 30, 
2017 2018 2017 2018 
Revenue $41,338 $50,454 $120,489 $151,770 
Cost of revenue 22,571 27,474 66,431 79,404 
Gross profit 18,767 22,980 54,058 72,366 
Operating expenses: 
Research and development 2,771 5,895 7,862 14,111 
Sales and marketing 3,128 5,422 8,099 14,598 
General and administrative 9,797 11,576 25,691 33,635 
Total operating expenses 15,696 22,893 41,652 62,344 
Operating income 3,071 87 12,406 10,022 
Other (expense) income, net (538)103 (1,950)242 
Income before taxes 2,533 190 10,456 10,264 
Income tax (provision) benefit (899)2,320 (3,886)8,949 
Net income $1,634 $2,510 $6,570 $19,213 
Other comprehensive loss 
Unrealized loss on marketable securities, net of income tax benefit $— $(1)$— $(3)
Total comprehensive income $1,634 $2,509 $6,570 $19,210 
Earnings per share: 
Net income $1,634 $2,510 $6,570 $19,213 
Less: net income allocated to participating securities 213 — 858 — 
Net income attributable to common stockholders $1,421 $2,510 $5,712 $19,213 
Net income per share: 
Basic $0.12 $0.13 $0.48 $1.05 
Diluted $0.11 $0.12 $0.42 $0.91 
Weighted average number of common shares outstanding: 
Basic 11,828,657 19,072,196 11,814,045 18,300,435 
Diluted 13,252,737 21,146,124 13,487,649 21,065,802 

The Company recognized total stock-based compensation expense in continuing operations as follows:
Three months ended
September 30, 
Nine months ended
September 30, 
2017 2018 2017 2018 
Cost of revenue $17 $30 $57 $79 
Research and development 38 173 100 376 
Sales and marketing 54 146 124 364 
General and administrative 503 413 821 1,198 
Total $612 $762 $1,102 $2,017 








CONDENSED CONSOLIDATED BALANCE SHEETS
(In Thousands)
(unaudited)
December 31, 2017September 30, 2018
Assets 
Current assets: 
Cash and cash equivalents $37,627 $48,574 
Marketable securities — 14,936 
Accounts receivable, net of allowance for doubtful accounts 21,225 23,780 
Prepaid expenses and other current assets 6,400 7,839 
Total current assets 65,252 95,129 
Property and equipment, net 14,946 21,770 
Intangible assets, net 7,643 7,219 
Deferred costs, non-current 2,068 1,771 
Other long-term assets 1,192 769 
Goodwill 6,867 6,867 
Deferred tax asset 6,526 15,568 
Total assets $104,494 $149,093 
Liabilities and stockholders’ equity 
Current liabilities: 
Accounts payable $3,025 $4,294 
Accrued expenses and other current liabilities 15,725 20,294 
Current portion of deferred revenue and advanced billings 5,768 7,052 
Total current liabilities 24,518 31,640 
Other liabilities 716 2,605 
Deferred revenue, net of current portion 2,549 6,612 
Total liabilities 27,783 40,857 
Stockholders’ equity: 
Class A and Class B common stock 17 19 
Additional paid-in capital 102,465 114,778 
Accumulated deficit (25,771)(6,558)
Accumulated other comprehensive loss — (3)
Total stockholders’ equity 76,711 108,236 
Total liabilities and stockholders’ equity $104,494 $149,093 






CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(In Thousands)
(unaudited)
Nine Months Ended
September 30, 
20172018
Operating activities 
Net income $6,570 $19,213 
Adjustments to reconcile net income to net cash provided by operating activities: 
Depreciation and amortization 4,272 4,109 
Accretion of bond discount — (80)
Amortization of debt issuance costs 96 48 
Stock-based compensation 1,102 2,017 
Change in fair value of shareholders’ anti-dilutive arrangement 689 — 
Deferred taxes 3,450 (9,041)
Loss on disposal of property and equipment 55 27 
Changes in operating assets and liabilities: 
Accounts receivable (1,864)(2,555)
Prepaid expenses and other assets (1,470)(1,122)
Deferred costs (3,556)345 
Accounts payable (2,339)(778)
Accrued expenses and other liabilities 1,267 6,471 
Deferred revenue and advanced billings 1,405 5,347 
Net cash provided by operating activities 9,677 24,001 
Investing activities 
Purchase of property and equipment (2,155)(4,921)
Capitalized software development costs (2,586)(3,511)
Proceeds from sale of property and equipment 
Purchase of marketable securities — (23,860)
Maturities of marketable securities — 9,000 
Net cash used in investing activities (4,738)(23,289)
Financing activities 
Borrowings on line of credit 4,000 — 
Repayments on line of credit (9,000)— 
Payments on capital leases (49)(74)
Repayments on term loan (1,500)— 
Payment of costs related to the initial public offering — (285)
Proceeds from issuances of common stock 174 10,584 
Net cash (used in) provided by financing activities (6,375)10,225 
Net (decrease) increase in cash, cash equivalents, and restricted cash (1,436)10,937 
Cash, cash equivalents, and restricted cash, beginning of period 7,028 37,870 
Cash, cash equivalents, and restricted cash, end of period $5,592 $48,807 
Supplemental disclosure of cash flow information 
Cash paid during the year for interest $1,346 $74 
Cash paid for taxes $691 $155 
Supplemental disclosure of noncash investing and financing activities 
Purchase of property and equipment, accrued but not paid $168 $2,107 




Reconciliation of Non-GAAP Financial Measures
(In Thousands, Except Share and per Share Amounts)
(Unaudited)
Non-GAAP Gross Profit and Non-GAAP Gross Margin
Consolidated
Three months ended
September 30, 
Nine months ended
September 30, 
2017201820172018
Consolidated Gross Profit $18,767 $22,980 $54,058 $72,366 
Depreciation 1,161 1,135 3,245 3,214 
Stock-based compensation 17 30 57 79 
Non-GAAP Gross Profit $19,945 $24,145 $57,360 $75,659 
Non-GAAP Gross Margin % 48 %48 %48 %50 %
By Segment
CPaaS
Three months ended
September 30, 
Nine months ended
September 30, 
2017201820172018
CPaaS Gross Profit $14,150 $17,541 $40,197 $51,229 
Depreciation 1,161 1,135 3,245 3,214 
Stock-based compensation 17 30 57 79 
Non-GAAP Gross Profit $15,328 $18,706 $43,499 $54,522 
Non-GAAP CPaaS Gross Margin % 46 %45 %45 %45 %
Other
There are no non-GAAP adjustments to gross profit for the Other segment.

Adjusted EBITDA
Three months ended
September 30, 
Nine months ended
September 30, 
2017201820172018
Net income $1,634 $2,510 $6,570 $19,213 
Income tax provision /(benefit)(1) 
899 (2,320)3,886 (8,949)
Interest expense (income), net 402 (103)1,261 (242)
Depreciation 1,241 1,296 3,643 3,685 
Amortization 210 130 629 424 
Stock-based compensation 612 762 1,102 2,017 
Loss on disposal of property and equipment 46 17 55 27 
Change in fair value of shareholders' anti-dilutive arrangement (2)
136 — 689 — 
Adjusted EBITDA $5,180 $2,292 $17,835 $16,175 
________________________
(1) Includes $4,163 and $11,215 of excess tax benefits associated with the exercise of stock options in the three and nine months ended September 30, 2018, respectively.
(2) Relates to an anti-dilutive agreement which allows certain principal non-founder shareholders the ability to purchase additional common shares. See Note 4, Fair Value of Financial Instruments, in the Annual Report on Form 10-K for further explanation.




Reconciliation of Non-GAAP Financial Measures
(In Thousands, Except Share and per Share Amounts)
(Unaudited)
Non-GAAP Net Income (Loss)
Three months ended
September 30, 
Nine months ended
September 30, 
2017201820172018
Net income $1,634 $2,510 $6,570 $19,213 
Stock-based compensation 612 762 1,102 2,017 
Change in fair value of shareholders' anti-dilutive arrangement (1)
136 — 689 — 
Amortization related to acquisitions 130 130 390 390 
Loss on disposal of property and equipment 46 17 55 27 
Estimated tax effects of adjustments (351)(233)(852)(625)
Income tax benefit of option exercises — (4,163)— (11,215)
Non-GAAP net income (loss) $2,207 $(977)$7,954 $9,807 
Non-GAAP net income (loss) per Non-GAAP share 
Basic $0.16 $(0.05)$0.59 $0.54 
Diluted $0.15 $(0.05)$0.52 $0.47 
Non-GAAP weighted average number of shares outstanding 
Basic 11,828,657 19,072,196 11,814,045 18,300,435 
Series A redeemable convertible preferred stock outstanding 1,775,000 — 1,775,000 — 
Non-GAAP basic shares 13,603,657 19,072,196 13,589,045 18,300,435 
Diluted 13,252,737 21,146,124 13,487,649 21,065,802 
Series A redeemable convertible preferred stock outstanding 1,775,000 — 1,775,000 — 
Non-GAAP diluted shares 15,027,737 21,146,124 15,262,649 21,065,802 
________________________
(1) Relates to an anti-dilutive agreement which allows certain principal non-founder shareholders the ability to purchase additional common shares. See Note 4, Fair Value of Financial Instruments, in the Annual Report on Form 10-K for further explanation.

Free Cash Flow
Three months ended
September 30, 
Nine months ended
September 30, 
2017201820172018
Net cash provided by operating activities $4,671 $6,884 $9,677 $24,001 
Net cash used in investing in capital assets (1)
(2,020)(3,772)(4,741)(8,432)
Free cash flow $2,651 $3,112 $4,936 $15,569 
________________________
(1) Represents the acquisition cost of property, equipment and capitalized development costs for software for internal use.


Investor Contact
Marc P. Griffin
ICR, Inc., for Bandwidth
919-283-5993
ir@bandwidth.com