Bandwidth Touts Voice AI and Salesforce Agentforce Upside at Needham Conference

Key Points

• Bandwidth is positioning its owned global voice network as a key advantage for voice AI, citing benefits in quality, reliability, cost and lower latency. Executives said even small latency improvements could matter for more responsive conversational AI.
• The Salesforce Agentforce Voice Agents partnership is being framed as a major growth opportunity, with Bandwidth saying its global reach and orchestration tools made it the right integration partner. Management said any revenue contribution from Agentforce would likely be upside to current guidance.
• Software services and enterprise wins are accelerating, with software-services ARR rising to $25 million from $15 million at year-end and Bandwidth targeting stronger margins and growth into 2026. The company also said it added two more $1 million-plus customers in the first quarter and remains on track to match or exceed last year’s large-deal pace.

Bandwidth NASDAQ: BAND executives used an appearance at the Needham Technology and Media Conference to emphasize the company’s positioning in voice AI, its Salesforce Agentforce partnership and improving financial targets tied to software services and enterprise voice growth.

Chairman and CEO David Morken described Raleigh, North Carolina-based Bandwidth as a global communications provider with an owned and operated voice network in more than 60 countries, paired with a software platform that supports voice calling and text messaging for enterprise, conferencing, unified communications and CRM customers.

Morken said the company differs from incumbent carriers such as Verizon, AT&T and Lumen in two main ways: its international footprint and its software layer, which enables customers to orchestrate call flows, provision services in real time and configure services through a graphical interface, API and, more recently, a command-line interface for “agentic voice agents.”

Bandwidth Highlights Network Ownership as AI Advantage

Morken said owning and operating a global voice network gives Bandwidth advantages in quality, reliability and cost. He said the model allows the company to manage network performance directly and commit to service-level agreements with large enterprise customers.

He also said the owned-network model has helped improve gross margins. Morken said Bandwidth had gross margins in the mid-40% range when it went public in 2017 and is now “just below 60%” companywide, with voice services showing a similar profile. He attributed that improvement to adding more voice traffic onto fixed infrastructure costs.

Latency is becoming increasingly important as voice AI use cases develop, Morken said. He noted that inference and reasoning can already take about 400 milliseconds for a round trip, while public switched telephone network latency can also be about 400 milliseconds. Even small gains in network latency, such as 20 or 50 milliseconds, can matter for conversational responsiveness, he said.

“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,” Morken said.

Salesforce Agentforce Partnership Seen as Key Growth Opportunity

Morken said Bandwidth won its partnership with Salesforce for Agentforce Voice Agents because of its global reach and call-flow orchestration capabilities. He said Salesforce’s vision that every call could include an intelligent voice agent aligns with Bandwidth’s platform and network assets.

Asked whether Salesforce could have done the integration with a traditional carrier, Morken said it could not, citing the global ambition of the offering and the need for orchestration to integrate with Salesforce’s technology stack.

Bandwidth executives said Salesforce launched the offering in mid-March and has customer discussions underway that are leading to customer discussions with Bandwidth. However, Chief Financial Officer Daryl Raiford said the company has not built a significant financial contribution from Agentforce into its current-year outlook, meaning adoption in the second half would represent upside to the guidance.

Software Services ARR Rises to $25 Million

Bandwidth said annual recurring revenue from software services exited the first quarter at $25 million, up from $15 million at the end of December. Morken said the figure includes platform fees for Maestro, usage-based trust services that help brands verify their identity when calling, and integrations across contact-center-as-a-service, unified-communications-as-a-service and AI platforms.

Raiford said those software services are primarily recognized on a monthly recurring charge basis and have a gross margin profile that is “extremely accretive” to consolidated gross margin.

Morken said AI-driven call flows can create more monetization opportunities than traditional voice calls. A call that previously connected two parties may now also route to sentiment analysis, transcription, translation or recording services, creating multiple call legs and additional value for Bandwidth.

Executives Point to Enterprise Wins and 2026 Targets

Raiford said Bandwidth is guiding for approximately 18% total revenue growth, 10% Cloud Communications growth, a 60% target gross margin, a 20% EBITDA margin and a 15% free cash flow margin. He also cited 31% EBITDA growth and “substantial” free cash flow growth.

The company said it added six $1 million-plus contract-value customers last year, a record for Bandwidth. Raiford said all of the large voice wins came from legacy incumbent carriers, while one large messaging win came from a CPaaS competitor. He said one of the six customers had fully deployed by the first quarter and did so at 120% of the company’s initial estimated total contract value. Other customers are expected to deploy in the current quarter and into the third quarter.

Raiford said Bandwidth added two more $1 million-plus customers in the first quarter and is on track to match or exceed last year’s level, though the company does not provide detailed bookings guidance. He said deployment for the largest enterprise customers can take three to nine months.

Bandwidth also said Global Voice Plans revenue growth in the first quarter of 2026 tripled from the prior-year period, driven by both price and volume. Raiford said volume growth is coming from large platform, hyperscaler, CCaaS and UCaaS customers, while pricing benefits are tied in part to adoption of software services such as Maestro.

Capital Allocation Focuses on R&D, Deleveraging and Buybacks

Raiford said Bandwidth’s capital allocation priorities include profitable growth, R&D investment, deleveraging and share repurchases. He said the company is making its largest R&D investment this year as it adds software-services features and capabilities.

Bandwidth ended the first quarter with $150 million of long-term debt in convertible notes due April 1, 2028, compared with a guided 2026 EBITDA midpoint of $122 million. Raiford said that puts leverage at roughly 1.2 times long-term debt. He also noted the board authorized an $80 million share repurchase program, with $11 million deployed in March after the authorization was announced.

On capital expenditures, Raiford said Bandwidth has typically maintained a 3% to 4% of revenue CapEx rate, or about $15 million to $20 million annually. He said the company invested an additional $10 million to $12 million in 2025 for network expansion, including geographic expansion in Asia and U.S. network optimization, positioning the network for the next several years.

About Bandwidth NASDAQ: BAND

Bandwidth Inc operates a cloud-based communications platform that provides voice, messaging and emergency services APIs for enterprises and developers. Through its proprietary network and software-as-a-service model, the company enables customers to integrate programmable voice calls, text messaging and 9-1-1 routing into their applications. Bandwidth's solutions aim to reduce complexity and improve reliability in mission-critical communications, serving industries such as healthcare, financial services, on-demand mobility and customer engagement.

Founded in 1999 in Raleigh, North Carolina by co-founders David Morken and Henry Kaestner, Bandwidth initially focused on voice-over-IP infrastructure before evolving into a full communications API provider.

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