Bandwidth Inc. has recently released its 10-K report, providing a comprehensive overview of its financial performance and operations. Bandwidth operates as a cloud-based software-powered communications platform-as-a-service provider, enabling enterprises to create, scale, and operate voice or messaging communications services across various mobile applications or connected devices. The company also offers voice services through SIP or programmable voice application programming interfaces (API), software APIs for messaging, communications solutions with integrated local emergency services, number management solutions, insights on customer's voice and messaging performance, and bring your own carrier integrations services. Bandwidth serves technology companies, enterprise customers, and software-as-a-service platforms. The company's total revenue for the years ended December 31, 2025, 2024, and 2023, was $753 million, $748 million, and $601 million, respectively, representing an increase of 1% in 2025 and an increase of 25% in 2024. The net loss in 2025, 2024, and 2023 was $13 million, $7 million, and $16 million, respectively.
Bandwidth's revenue for the year ended December 31, 2025, was $753.8 million, with cloud communications revenue accounting for $561.4 million and messaging surcharges contributing $192.4 million. The company's cloud communications revenue saw a 4% increase compared to the same period in 2024, driven by growth in Global Voice Plans revenue. Bandwidth's net retention rate for the years ended December 31, 2025, 2024, and 2023, was 98%, 122%, and 101%, respectively. The lower net retention rate in 2023 and 2025 was primarily driven by lower political messaging revenue following the conclusion of the 2022 and 2024 U.S. election cycles.
Bandwidth's cost of revenue consists of fees paid to other network service providers, network operations costs, personnel costs, allocated costs of facilities and information technology, amortization of acquired technology intangibles, and depreciation. The company's gross margin was 39% for the year ended December 31, 2025. Operating expenses for research and development, sales and marketing, and general and administrative activities were $309.4 million, resulting in an operating loss of $14.4 million for the same period.
The company's effective tax rate for the years ended December 31, 2025, 2024, and 2023, was 22.2%, 27.1%, and 15.3%, respectively. Bandwidth's net loss for the year ended December 31, 2025, was $12.9 million, compared to a net loss of $6.5 million in 2024. The company also recorded a net gain on extinguishment of debt of $1.1 million for the year ended December 31, 2025. The market has reacted to these announcements by moving the company's shares -0.89% to a price of $13.41. Check out the company's full 10-K submission here.
