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Last quarter, Bandwidth positioned voice as the new platform. This quarter, it showed that voice can scale profitably. Revenue came in at $192M, up 11% YoY on a normalized basis—i.e., if you take out political revenue from yearly and quarterly comparisons.
Gross margin held steady at 38% (58% non-GaaP), even without any help from election-year messaging. Adjusted EBITDA was $24M. Free cash flow reached $13M. For the third time this year, Bandwidth raised full-year EBITDA guidance.
The Good: Revenue Growth, Onboarding
Enterprise Voice revenue rose 22%, with Global Voice Plans adding another 7%, both fueled by demand from large, compliance-heavy customers.
International revenue, nearly all voice, reported 11% growth. Combined voice revenue grew 9%, the strongest YoY acceleration Bandwidth has seen since pre-pandemic.
Every major enterprise deal this quarter involved Maestro. It is now central to how Bandwidth lands and expands in the enterprise, with orchestration and real-time routing built into the win.
Customer ramp cycles are tightening, especially through channels. $1M+ ARR deals signed earlier this year are already contributing. Internal systems, support teams, and implementation timelines have all matured. David Morken and Daryl Raiford both touted the company’s ability to onboard customers without disruption.
Bandwidth expects to exit 2025 with over $10M in annualized software MRR, mostly embedded in voice deals. That software helped it hold the 58% non-GaaP margin even without political messaging.
Net retention held at 105%, or 107% if you strip out the one-time boost from last year’s political messaging. Logo retention stayed above 99%. Average ARR per customer hit a record $231K, up 46% over the last three years.
The full-year revenue range was tightened, with the midpoint now at $753M. Cloud Communications is expected to grow 8% organically, up from earlier expectations. EBITDA guidance rose to $91M, or roughly $1.30 per share on a non-GAAP basis. Messaging held its course, exactly as guided, but surcharges were trimmed modestly heading into the Q4 holiday season.
The Interesting: AI to Build Trust, Voice Performance
Creating customer service agents, it seems, is the first stop for AI products. In Bandwidth’s case, it’s helping with the “spam likely” problem that most legitimate brands face.
AI Receptionist and Activation Agent are shaping customer conversations, especially in regulated and high-scale environments. In one case, a large transportation and logistics provider consolidated from 161 call paths down to 10, largely to deploy Number Reputation Management. The product started as a way to fix “spam likely” labels and now functions as a deal-closing feature.
RCS also got its moment. The partnership with Out There Media gives Bandwidth access to household brands like Coca-Cola, Disney, Unilever, and Netflix. The deal positions Bandwidth as the sole US messaging provider for those campaigns. There wasn’t a lot of detail on near-term revenue, and no analyst pressed it, which tells you something. But as a channel and a brand halo, it extends Bandwidth’s value far beyond carrier-grade SMS.
Voice is performing better than expected, which explains the guidance improvement. Messaging is performing as expected. Surcharges were trimmed slightly due to carrier mix and expected traffic heading into Q4.
The Unknown: Software ARR, RCS
The biggest unknown now is software scale. Hitting $10M in annualized MRR by year-end is solid, but it’s still a base. The 2026 margin model hinges on accelerating that number. Maestro is the right vessel, and trust products like NRM are building real adoption. But can Bandwidth turn that into a rhythm across every enterprise deployment? That’s the test.
RCS also remains a question mark. The Out There Media deal brings reach and brand gravity, but no one on the call offered a forecast. It’s a great positioning play. It may become a revenue driver. But for now, it’s just good PR.
I could copy/paste my general industry annoyance and impatience about the money not following the hype (yet), when it comes to RCS, but I won’t.
Finally
Voice is growing, software is sticking, and messaging remains disciplined. The company is delivering the kind of operational consistency that makes margin expansion possible. They’re continuing the solid performance from Q2. That consistency is harder than it looks. And more valuable.