10-Q 1 band-20220331.htm 10-Q band-20220331
00015144162022Q1FALSE--12-31http://fasb.org/us-gaap/2021-01-31#AccountingStandardsUpdate202006Memberhttp://fasb.org/us-gaap/2021-01-31#AccruedLiabilitiesCurrenthttp://fasb.org/us-gaap/2021-01-31#AccruedLiabilitiesCurrenthttp://fasb.org/us-gaap/2021-01-31#OtherLiabilitiesNoncurrenthttp://fasb.org/us-gaap/2021-01-31#OtherLiabilitiesNoncurrentP20Y0.01098570.0055781P120DP12M0.01098570.01098570.00557810.005578100015144162022-01-012022-03-310001514416us-gaap:CommonClassAMember2022-04-29xbrli:shares0001514416us-gaap:CommonClassBMember2022-04-2900015144162022-03-31iso4217:USD00015144162021-12-3100015144162021-01-012021-03-31iso4217:USDxbrli:shares0001514416us-gaap:CommonStockMemberus-gaap:CommonClassAMember2020-12-310001514416us-gaap:CommonStockMemberus-gaap:CommonClassBMember2020-12-310001514416us-gaap:AdditionalPaidInCapitalMember2020-12-310001514416us-gaap:AccumulatedOtherComprehensiveIncomeMember2020-12-310001514416us-gaap:RetainedEarningsMember2020-12-3100015144162020-12-310001514416us-gaap:AdditionalPaidInCapitalMember2021-01-012021-03-310001514416us-gaap:CommonStockMemberus-gaap:CommonClassAMember2021-01-012021-03-310001514416us-gaap:CommonStockMemberus-gaap:CommonClassBMember2021-01-012021-03-310001514416us-gaap:AccumulatedOtherComprehensiveIncomeMember2021-01-012021-03-310001514416us-gaap:RetainedEarningsMember2021-01-012021-03-310001514416us-gaap:CommonStockMemberus-gaap:CommonClassAMember2021-03-310001514416us-gaap:CommonStockMemberus-gaap:CommonClassBMember2021-03-310001514416us-gaap:AdditionalPaidInCapitalMember2021-03-310001514416us-gaap:AccumulatedOtherComprehensiveIncomeMember2021-03-310001514416us-gaap:RetainedEarningsMember2021-03-3100015144162021-03-310001514416us-gaap:AdditionalPaidInCapitalMember2021-04-012021-06-3000015144162021-04-012021-06-300001514416us-gaap:CommonStockMemberus-gaap:CommonClassAMember2021-04-012021-06-300001514416us-gaap:AccumulatedOtherComprehensiveIncomeMember2021-04-012021-06-300001514416us-gaap:RetainedEarningsMember2021-04-012021-06-300001514416us-gaap:CommonStockMemberus-gaap:CommonClassAMember2021-06-300001514416us-gaap:CommonStockMemberus-gaap:CommonClassBMember2021-06-300001514416us-gaap:AdditionalPaidInCapitalMember2021-06-300001514416us-gaap:AccumulatedOtherComprehensiveIncomeMember2021-06-300001514416us-gaap:RetainedEarningsMember2021-06-3000015144162021-06-300001514416us-gaap:CommonStockMemberus-gaap:CommonClassAMember2021-07-012021-09-300001514416us-gaap:AdditionalPaidInCapitalMember2021-07-012021-09-3000015144162021-07-012021-09-300001514416us-gaap:CommonStockMemberus-gaap:CommonClassBMember2021-07-012021-09-300001514416us-gaap:AccumulatedOtherComprehensiveIncomeMember2021-07-012021-09-300001514416us-gaap:RetainedEarningsMember2021-07-012021-09-300001514416us-gaap:CommonStockMemberus-gaap:CommonClassAMember2021-09-300001514416us-gaap:CommonStockMemberus-gaap:CommonClassBMember2021-09-300001514416us-gaap:AdditionalPaidInCapitalMember2021-09-300001514416us-gaap:AccumulatedOtherComprehensiveIncomeMember2021-09-300001514416us-gaap:RetainedEarningsMember2021-09-3000015144162021-09-300001514416us-gaap:CommonStockMemberus-gaap:CommonClassAMember2021-10-012021-12-310001514416us-gaap:AdditionalPaidInCapitalMember2021-10-012021-12-3100015144162021-10-012021-12-310001514416us-gaap:AccumulatedOtherComprehensiveIncomeMember2021-10-012021-12-310001514416us-gaap:RetainedEarningsMember2021-10-012021-12-310001514416us-gaap:CommonStockMemberus-gaap:CommonClassAMember2021-12-310001514416us-gaap:CommonStockMemberus-gaap:CommonClassBMember2021-12-310001514416us-gaap:AdditionalPaidInCapitalMember2021-12-310001514416us-gaap:AccumulatedOtherComprehensiveIncomeMember2021-12-310001514416us-gaap:RetainedEarningsMember2021-12-310001514416us-gaap:CommonStockMemberus-gaap:CommonClassAMember2022-01-012022-03-310001514416us-gaap:AdditionalPaidInCapitalMember2022-01-012022-03-310001514416us-gaap:AdditionalPaidInCapitalMembersrt:CumulativeEffectPeriodOfAdoptionAdjustmentMember2021-12-310001514416us-gaap:RetainedEarningsMembersrt:CumulativeEffectPeriodOfAdoptionAdjustmentMember2021-12-310001514416srt:CumulativeEffectPeriodOfAdoptionAdjustmentMember2021-12-310001514416us-gaap:AccumulatedOtherComprehensiveIncomeMember2022-01-012022-03-310001514416us-gaap:RetainedEarningsMember2022-01-012022-03-310001514416us-gaap:CommonStockMemberus-gaap:CommonClassAMember2022-03-310001514416us-gaap:CommonStockMemberus-gaap:CommonClassBMember2022-03-310001514416us-gaap:AdditionalPaidInCapitalMember2022-03-310001514416us-gaap:AccumulatedOtherComprehensiveIncomeMember2022-03-310001514416us-gaap:RetainedEarningsMember2022-03-310001514416srt:ScenarioPreviouslyReportedMember2021-01-012021-03-310001514416band:CustomerOneMemberus-gaap:AccountsReceivableMemberus-gaap:CustomerConcentrationRiskMember2022-01-012022-03-31xbrli:pure0001514416band:CustomerOneMemberus-gaap:AccountsReceivableMemberus-gaap:CustomerConcentrationRiskMember2021-01-012021-12-310001514416us-gaap:AccountingStandardsUpdate202006Membersrt:CumulativeEffectPeriodOfAdoptionAdjustedBalanceMember2022-01-010001514416us-gaap:AccountingStandardsUpdate202006Membersrt:CumulativeEffectPeriodOfAdoptionAdjustedBalanceMember2022-01-012022-03-310001514416us-gaap:FairValueMeasurementsRecurringMemberus-gaap:FairValueInputsLevel1Memberus-gaap:MoneyMarketFundsMember2022-03-310001514416us-gaap:FairValueMeasurementsRecurringMemberus-gaap:MoneyMarketFundsMemberus-gaap:FairValueInputsLevel2Member2022-03-310001514416us-gaap:FairValueMeasurementsRecurringMemberus-gaap:MoneyMarketFundsMemberus-gaap:FairValueInputsLevel3Member2022-03-310001514416us-gaap:FairValueMeasurementsRecurringMemberus-gaap:MoneyMarketFundsMember2022-03-310001514416us-gaap:FairValueMeasurementsRecurringMemberus-gaap:FairValueInputsLevel1Member2022-03-310001514416us-gaap:FairValueMeasurementsRecurringMemberus-gaap:FairValueInputsLevel2Member2022-03-310001514416us-gaap:FairValueMeasurementsRecurringMemberus-gaap:FairValueInputsLevel3Member2022-03-310001514416us-gaap:FairValueMeasurementsRecurringMember2022-03-310001514416us-gaap:FairValueMeasurementsRecurringMemberus-gaap:FairValueInputsLevel1Memberus-gaap:MoneyMarketFundsMember2021-12-310001514416us-gaap:FairValueMeasurementsRecurringMemberus-gaap:MoneyMarketFundsMemberus-gaap:FairValueInputsLevel2Member2021-12-310001514416us-gaap:FairValueMeasurementsRecurringMemberus-gaap:MoneyMarketFundsMemberus-gaap:FairValueInputsLevel3Member2021-12-310001514416us-gaap:FairValueMeasurementsRecurringMemberus-gaap:MoneyMarketFundsMember2021-12-310001514416us-gaap:FairValueMeasurementsRecurringMemberus-gaap:FairValueInputsLevel1Member2021-12-310001514416us-gaap:FairValueMeasurementsRecurringMemberus-gaap:FairValueInputsLevel2Member2021-12-310001514416us-gaap:FairValueMeasurementsRecurringMemberus-gaap:FairValueInputsLevel3Member2021-12-310001514416us-gaap:FairValueMeasurementsRecurringMember2021-12-310001514416us-gaap:ConvertibleDebtMemberband:ZeroPointTwoFivePercentConvertibleSeniorNotesDue2026Member2022-03-310001514416band:ZeroPointFiveZeroPercentConvertibleSeniorNotesDue2028Memberus-gaap:ConvertibleDebtMember2022-03-310001514416us-gaap:ConvertibleDebtMemberband:ZeroPointTwoFivePercentConvertibleSeniorNotesDue2026Member2021-12-310001514416band:ZeroPointFiveZeroPercentConvertibleSeniorNotesDue2028Memberus-gaap:ConvertibleDebtMember2021-12-310001514416band:RelayIncMember2022-03-31utr:sqft0001514416srt:MinimumMember2022-03-310001514416srt:MaximumMember2022-03-31band:lease0001514416band:UndevelopedLandMember2021-06-04utr:acre0001514416band:UndevelopedLandMember2021-06-042021-06-040001514416band:USEFEdwardsMillOwnerLLCMemberband:UndevelopedLandMember2021-06-052021-06-050001514416band:UndevelopedLandMember2021-06-050001514416band:LeaseAgreementMember2021-05-270001514416band:LeaseAgreementMember2021-05-272021-05-270001514416band:USEFEdwardsMillOwnerLLCMemberband:LeaseAgreementMember2021-05-270001514416band:LeaseAgreementMember2022-01-012022-03-310001514416us-gaap:FurnitureAndFixturesMember2022-03-310001514416us-gaap:FurnitureAndFixturesMember2021-12-310001514416band:ComputerAndOfficeEquipmentMember2022-03-310001514416band:ComputerAndOfficeEquipmentMember2021-12-310001514416band:TelecommunicationsEquipmentMember2022-03-310001514416band:TelecommunicationsEquipmentMember2021-12-310001514416us-gaap:LeaseholdImprovementsMember2022-03-310001514416us-gaap:LeaseholdImprovementsMember2021-12-310001514416us-gaap:SoftwareAndSoftwareDevelopmentCostsMember2022-03-310001514416us-gaap:SoftwareAndSoftwareDevelopmentCostsMember2021-12-310001514416us-gaap:SoftwareDevelopmentMember2022-03-310001514416us-gaap:SoftwareDevelopmentMember2021-12-310001514416us-gaap:AutomobilesMember2022-03-310001514416us-gaap:AutomobilesMember2021-12-310001514416us-gaap:LandMember2022-03-310001514416us-gaap:LandMember2021-12-310001514416us-gaap:PrepaidExpensesAndOtherCurrentAssetsMember2022-03-310001514416us-gaap:OtherNoncurrentAssetsMember2022-03-310001514416us-gaap:CostOfSalesMember2022-01-012022-03-310001514416us-gaap:CostOfSalesMember2021-01-012021-03-310001514416us-gaap:ResearchAndDevelopmentExpenseMember2022-01-012022-03-310001514416us-gaap:ResearchAndDevelopmentExpenseMember2021-01-012021-03-310001514416us-gaap:SellingAndMarketingExpenseMember2022-01-012022-03-310001514416us-gaap:SellingAndMarketingExpenseMember2021-01-012021-03-310001514416us-gaap:GeneralAndAdministrativeExpenseMember2022-01-012022-03-310001514416us-gaap:GeneralAndAdministrativeExpenseMember2021-01-012021-03-310001514416us-gaap:CustomerRelationshipsMember2022-03-310001514416us-gaap:CustomerRelationshipsMembersrt:MinimumMember2022-01-012022-03-310001514416srt:MaximumMemberus-gaap:CustomerRelationshipsMember2022-01-012022-03-310001514416us-gaap:DevelopedTechnologyRightsMember2022-03-310001514416us-gaap:DevelopedTechnologyRightsMember2022-01-012022-03-310001514416us-gaap:OtherIntangibleAssetsMember2022-03-310001514416us-gaap:OtherIntangibleAssetsMembersrt:MinimumMember2022-01-012022-03-310001514416srt:MaximumMemberus-gaap:OtherIntangibleAssetsMember2022-01-012022-03-310001514416us-gaap:LicensingAgreementsMember2022-03-310001514416us-gaap:CustomerRelationshipsMember2021-12-310001514416us-gaap:CustomerRelationshipsMembersrt:MinimumMember2021-01-012021-03-310001514416srt:MaximumMemberus-gaap:CustomerRelationshipsMember2021-01-012021-03-310001514416us-gaap:DevelopedTechnologyRightsMember2021-12-310001514416us-gaap:DevelopedTechnologyRightsMember2021-01-012021-03-310001514416us-gaap:OtherIntangibleAssetsMember2021-12-310001514416us-gaap:OtherIntangibleAssetsMembersrt:MinimumMember2021-01-012021-03-310001514416srt:MaximumMemberus-gaap:OtherIntangibleAssetsMember2021-01-012021-03-310001514416us-gaap:LicensingAgreementsMember2021-12-310001514416us-gaap:ConvertibleDebtMemberband:ZeroPointTwoFivePercentConvertibleSeniorNotesDue2026Member2020-02-280001514416us-gaap:ConvertibleDebtMemberband:ZeroPointTwoFivePercentConvertibleSeniorNotesDue2026Member2020-02-282020-02-280001514416us-gaap:CommonClassAMember2020-02-280001514416band:ZeroPointTwoFivePercentConvertibleSeniorNotesDue2026Member2020-02-282020-02-280001514416us-gaap:DebtInstrumentRedemptionPeriodOneMemberus-gaap:ConvertibleDebtMemberband:ZeroPointTwoFivePercentConvertibleSeniorNotesDue2026Memberus-gaap:CommonClassAMember2020-02-282020-02-28band:day0001514416us-gaap:DebtInstrumentRedemptionPeriodTwoMemberus-gaap:ConvertibleDebtMemberband:ZeroPointTwoFivePercentConvertibleSeniorNotesDue2026Member2020-02-282020-02-280001514416us-gaap:DebtInstrumentRedemptionPeriodTwoMemberus-gaap:ConvertibleDebtMemberband:ZeroPointTwoFivePercentConvertibleSeniorNotesDue2026Memberus-gaap:CommonClassAMember2020-02-282020-02-280001514416us-gaap:DebtInstrumentRedemptionPeriodOneMemberus-gaap:ConvertibleDebtMemberband:ZeroPointTwoFivePercentConvertibleSeniorNotesDue2026Memberus-gaap:CommonClassAMember2021-10-012022-03-310001514416us-gaap:AccountingStandardsUpdate202006Memberus-gaap:ConvertibleDebtMemberband:ZeroPointTwoFivePercentConvertibleSeniorNotesDue2026Membersrt:CumulativeEffectPeriodOfAdoptionAdjustedBalanceMember2021-01-010001514416band:ZeroPointFiveZeroPercentConvertibleSeniorNotesDue2028Memberus-gaap:ConvertibleDebtMember2021-03-160001514416band:ZeroPointFiveZeroPercentConvertibleSeniorNotesDue2028Memberus-gaap:ConvertibleDebtMember2021-03-162021-03-160001514416us-gaap:CommonClassAMember2021-03-160001514416us-gaap:DebtInstrumentRedemptionPeriodOneMemberband:ZeroPointFiveZeroPercentConvertibleSeniorNotesDue2028Memberus-gaap:ConvertibleDebtMemberus-gaap:CommonClassAMember2021-03-162021-03-160001514416us-gaap:DebtInstrumentRedemptionPeriodOneMemberband:ZeroPointFiveZeroPercentConvertibleSeniorNotesDue2028Memberus-gaap:ConvertibleDebtMember2021-03-162021-03-160001514416us-gaap:DebtInstrumentRedemptionPeriodTwoMemberband:ZeroPointFiveZeroPercentConvertibleSeniorNotesDue2028Memberus-gaap:ConvertibleDebtMember2021-03-162021-03-160001514416us-gaap:DebtInstrumentRedemptionPeriodTwoMemberband:ZeroPointFiveZeroPercentConvertibleSeniorNotesDue2028Memberus-gaap:ConvertibleDebtMemberus-gaap:CommonClassAMember2021-03-162021-03-160001514416us-gaap:AccountingStandardsUpdate202006Memberband:ZeroPointFiveZeroPercentConvertibleSeniorNotesDue2028Memberus-gaap:ConvertibleDebtMembersrt:CumulativeEffectPeriodOfAdoptionAdjustedBalanceMember2021-01-010001514416us-gaap:ConvertibleDebtMember2022-03-310001514416us-gaap:ConvertibleDebtMember2021-12-310001514416band:ZeroPointTwoFivePercentConvertibleSeniorNotesDue2026Member2022-01-012022-03-310001514416band:ZeroPointTwoFivePercentConvertibleSeniorNotesDue2026Member2021-01-012021-03-310001514416band:ZeroPointFiveZeroPercentConvertibleSeniorNotesDue2028Member2022-01-012022-03-310001514416band:ZeroPointFiveZeroPercentConvertibleSeniorNotesDue2028Member2021-01-012021-03-310001514416us-gaap:CommonClassAMember2020-02-282020-02-280001514416us-gaap:CommonClassAMember2021-03-162021-03-1600015144162020-02-282020-02-2800015144162021-03-162021-03-160001514416us-gaap:ConvertibleDebtMemberband:ZeroPointTwoFivePercentConvertibleSeniorNotesDue2026Memberus-gaap:CommonClassAMember2020-02-282020-02-280001514416band:ZeroPointFiveZeroPercentConvertibleSeniorNotesDue2028Memberus-gaap:ConvertibleDebtMemberus-gaap:CommonClassAMember2021-03-162021-03-160001514416us-gaap:NonUsMember2022-03-310001514416us-gaap:NonUsMember2021-12-310001514416country:US2022-01-012022-03-310001514416country:US2021-01-012021-03-310001514416us-gaap:NonUsMember2022-01-012022-03-310001514416us-gaap:NonUsMember2021-01-012021-03-310001514416us-gaap:CommonClassAMember2021-12-310001514416us-gaap:CommonClassAMember2022-03-31band:vote0001514416us-gaap:CommonClassBMember2021-12-310001514416us-gaap:CommonClassBMember2022-03-310001514416band:StockOptionsIssuedAndOutstandingMember2022-03-310001514416band:StockOptionsIssuedAndOutstandingMember2021-12-310001514416us-gaap:RestrictedStockUnitsRSUMember2022-03-310001514416us-gaap:RestrictedStockUnitsRSUMember2021-12-310001514416us-gaap:StockCompensationPlanMember2022-03-310001514416us-gaap:StockCompensationPlanMember2021-12-310001514416band:StockOptionPlan2010Member2017-11-090001514416band:A2017EquityCompensationPlanMember2017-11-090001514416band:A2017EquityCompensationPlanMember2018-01-012018-01-010001514416band:A2017EquityCompensationPlanMember2022-01-012022-01-010001514416band:A2017EquityCompensationPlanMemberus-gaap:EmployeeStockOptionMember2017-11-092017-11-090001514416us-gaap:RestrictedStockUnitsRSUMemberband:A2017EquityCompensationPlanMembersrt:DirectorMember2017-11-092017-11-090001514416us-gaap:RestrictedStockUnitsRSUMembersrt:ExecutiveOfficerMemberband:A2017EquityCompensationPlanMember2017-11-092017-11-090001514416us-gaap:RestrictedStockUnitsRSUMembersrt:ExecutiveOfficerMemberband:A2017EquityCompensationPlanMemberus-gaap:ShareBasedCompensationAwardTrancheOneMember2017-11-092017-11-090001514416band:ShareBasedCompensationAwardTrancheFiveMemberus-gaap:RestrictedStockUnitsRSUMembersrt:ExecutiveOfficerMemberband:A2017EquityCompensationPlanMember2017-11-092017-11-090001514416us-gaap:RestrictedStockUnitsRSUMembersrt:ExecutiveOfficerMemberband:A2017EquityCompensationPlanMemberus-gaap:ShareBasedCompensationAwardTrancheTwoMember2017-11-092017-11-090001514416us-gaap:RestrictedStockUnitsRSUMembersrt:ExecutiveOfficerMemberus-gaap:ShareBasedCompensationAwardTrancheThreeMemberband:A2017EquityCompensationPlanMember2017-11-092017-11-090001514416us-gaap:RestrictedStockUnitsRSUMembersrt:ExecutiveOfficerMemberband:A2017EquityCompensationPlanMemberband:SharebasedCompensationAwardTrancheFourMember2017-11-092017-11-090001514416us-gaap:RestrictedStockUnitsRSUMembersrt:ExecutiveOfficerMemberband:A2017EquityCompensationPlanMemberband:ShareBasedCompensationAwardTrancheSixMember2017-11-092017-11-090001514416us-gaap:RestrictedStockUnitsRSUMemberband:A2017EquityCompensationPlanMember2017-11-092017-11-090001514416us-gaap:EmployeeStockOptionMember2021-12-310001514416us-gaap:EmployeeStockOptionMember2021-01-012021-03-310001514416us-gaap:EmployeeStockOptionMember2022-01-012022-03-310001514416us-gaap:EmployeeStockOptionMember2022-03-310001514416us-gaap:RestrictedStockUnitsRSUMember2022-01-012022-03-3100015144162020-08-010001514416us-gaap:PensionPlansDefinedBenefitMemberus-gaap:ForeignPlanMember2022-01-012022-03-310001514416us-gaap:PensionPlansDefinedBenefitMemberus-gaap:ForeignPlanMember2021-01-012021-03-310001514416band:RelayFormerlyRepublicWirelessIncMemberband:MasterServicesAgreementMembersrt:AffiliatedEntityMember2022-01-012022-03-310001514416band:RelayFormerlyRepublicWirelessIncMemberband:MasterServicesAgreementMembersrt:AffiliatedEntityMember2021-01-012021-03-310001514416band:RelayFormerlyRepublicWirelessIncMemberband:MasterServicesAgreementMembersrt:AffiliatedEntityMember2022-03-310001514416band:RelayFormerlyRepublicWirelessIncMemberband:MasterServicesAgreementMembersrt:AffiliatedEntityMember2021-12-310001514416us-gaap:EmployeeStockOptionMember2022-01-012022-03-310001514416us-gaap:EmployeeStockOptionMember2021-01-012021-03-310001514416us-gaap:RestrictedStockUnitsRSUMember2022-01-012022-03-310001514416us-gaap:RestrictedStockUnitsRSUMember2021-01-012021-03-310001514416us-gaap:ConvertibleDebtSecuritiesMember2022-01-012022-03-310001514416us-gaap:ConvertibleDebtSecuritiesMember2021-01-012021-03-310001514416us-gaap:ConvertibleDebtMemberband:ZeroPointTwoFivePercentConvertibleSeniorNotesDue2026Memberus-gaap:CommonClassAMember2022-01-012022-03-310001514416us-gaap:ConvertibleDebtMemberband:ZeroPointTwoFivePercentConvertibleSeniorNotesDue2026Memberus-gaap:CommonClassAMember2021-01-012021-03-310001514416band:ZeroPointFiveZeroPercentConvertibleSeniorNotesDue2028Memberus-gaap:ConvertibleDebtMemberus-gaap:CommonClassAMember2022-01-012022-03-310001514416band:ZeroPointFiveZeroPercentConvertibleSeniorNotesDue2028Memberus-gaap:ConvertibleDebtMemberus-gaap:CommonClassAMember2021-01-012021-03-31

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
__________________________________

FORM 10-Q
__________________________________
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended March 31, 2022
OR
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from                 to
Commission File Number: 001-38285 
BANDWIDTH INC.
(Exact name of registrant as specified in its charter)
__________________________________
 
Delaware56-2242657
(State or other jurisdiction of
incorporation or organization)
(I.R.S. Employer
Identification Number)
900 Main Campus Drive
Raleigh, NC 27606
(Address of principal executive offices) (Zip Code) 
(800) 808-5150
(Registrant’s telephone number, including area code)
__________________________________

Securities Registered Pursuant to Section 12(b) of the Act:
Title of each classTrading Symbol(s)Name of each exchange on which registered
Class A Common Stock, par value $0.001 per shareBANDNASDAQ Global Select Market
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.  Yes  x No 
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).  Yes x  No 
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
Large accelerated filerAccelerated filer
Non-accelerated filerSmaller reporting company
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.     
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).  Yes   No 
As of April 29, 2022, 23,312,016 shares of the registrant’s Class A common stock and 1,965,170 shares of registrant’s Class B common stock were outstanding, respectively




BANDWIDTH INC.
Table of Contents
Page



Special Note Regarding Forward-Looking Statements
This Quarterly Report on Form 10-Q contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended (the “Securities Act”) and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”). All statements contained in this Quarterly Report on Form 10-Q, other than statements of historical fact, are forward-looking statements. Forward-looking statements generally can be identified by the words “may,” “will,” “expect,” “believe,” “anticipate,” “intend,” “could,” “would,” “project,” “plan,” “estimate,” or “continue,” or the negative of these words or other similar terms or expressions that concern our expectations strategy, plans or intentions. Forward-looking statements contained in this Quarterly Report on Form 10-Q include, but are not limited to, statements about:
our expectations about the impact of public health epidemics, such as COVID-19 (as defined herein), or natural disasters on the global economy and our business, results of operations and financial condition;
our ability to attract and retain customers, including large enterprises;
our approach to identifying, attracting and keeping new and existing customers, as well as our expectations regarding customer turnover;
our beliefs regarding network traffic growth and other trends related to the usage of our products and services;
our ability to successfully defend our network, systems and data against ever-evolving cybersecurity threats, including denial-of-service and ransomware attacks;
our expectations regarding revenue, costs, expenses, gross margin, dollar based net retention rate, adjusted EBITDA, non-generally accepted accounting principles in the United States of America (“GAAP”) net income and capital expenditures;
our beliefs regarding the growth of our business and how that impacts our liquidity and capital resources requirements;
the sufficiency of our cash and cash equivalents to meet our liquidity needs;
our ability to attract, train, and retain qualified employees and key personnel;
our beliefs regarding the expense and productivity of and competition for our sales force;
our expectations regarding headcount;
our ability to maintain and benefit from our corporate culture;
our plans to further invest in and grow our business, including international offerings, and our ability to effectively manage our growth and associated investments;
our ability to introduce new products and services and enhance existing products and services;
our ability to successfully integrate and benefit from any strategic acquisitions, including our acquisition of Voxbone (as defined herein), or future strategic acquisitions or investments;
our ability to effectively manage our international operations and expansion;
our ability to compete successfully against current and future competitors;
the evolution of technology affecting our products, services and markets;
the impact of certain new accounting standards and guidance, as well as the time and cost of continued compliance with existing rules and standards;
3

our beliefs regarding the use of Non-GAAP financial measures;
our ability to comply with modified or new industry standards, laws and regulations applicable to our products, services and business, including the General Data Protection Regulation (“GDPR”), the California Consumer Privacy Act of 2018 and other privacy regulations that may be implemented in the future, and Secure Telephone Identity Revisited and Signature-based Handling of Asserted Information Using toKENs and other robocalling prevention and anti-spam standards and increased costs associated with such compliance;
our customers’ violation of our policies or other misuse of our platform;
our ability to manage fees that have been or may be instituted by network providers that increase our costs;
our ability to maintain, protect and enhance our intellectual property;
our expectations regarding litigation and other pending or potential disputes;
our ability to service the interest on our Convertible Notes (as defined herein) and repay such Convertible Notes, to the extent required; and
other risks related to our indebtedness.
We caution you that the foregoing list may not contain all the forward-looking statements made in this Quarterly Report on Form 10-Q.
You should not rely upon forward-looking statements as predictions of future events. We have based the forward-looking statements contained in this Quarterly Report on Form 10-Q primarily on our current expectations and projections about future events and trends that we believe may affect our business, financial condition, results of operations and prospects. The outcome of the events described in these forward-looking statements is subject to risks, uncertainties and other factors described in the section titled “Risk Factors” and elsewhere in this Quarterly Report on Form 10-Q. Moreover, we operate in a very competitive and rapidly changing environment. New risks and uncertainties emerge from time to time and it is not possible for us to predict all risks and uncertainties that could have an impact on the forward-looking statements contained in this Quarterly Report on Form 10-Q. We cannot assure you that the results, events and circumstances reflected in the forward-looking statements will be achieved or occur, and actual results, events or circumstances could differ materially from those described in the forward-looking statements.
The forward-looking statements made in this Quarterly Report on Form 10-Q relate only to events as of the date on which the statements are made. We undertake no obligation to update any forward-looking statements made in this Quarterly Report on Form 10-Q to reflect events or circumstances after the date of this Quarterly Report on Form 10-Q or to reflect new information or the occurrence of unanticipated events, except as required by law. We may not actually achieve the plans, intentions or expectations disclosed in our forward-looking statements and you should not place undue reliance on our forward-looking statements. Our forward-looking statements do not reflect the potential impact of any future acquisitions, mergers, dispositions, joint ventures or investments we may make.

4

PART I - FINANCIAL INFORMATION

Item 1. Financial Statements

BANDWIDTH INC.
Condensed Consolidated Balance Sheets
(In thousands)
(Unaudited)
As of March 31,As of December 31,
20222021
Assets
Current assets:
Cash and cash equivalents$316,008 $331,453 
Restricted cash981 836 
Accounts receivable, net of allowance for doubtful accounts68,827 61,572 
Deferred costs3,315 3,204 
Prepaid expenses and other current assets24,166 15,820 
Total current assets413,297 412,885 
Property, plant and equipment, net68,553 69,604 
Operating right-of-use asset, net15,419 14,061 
Intangible assets, net202,502 211,217 
Deferred costs, non-current4,853 4,676 
Other long-term assets11,502 8,673 
Goodwill338,070 344,423 
Total assets$1,054,196 $1,065,539 
Liabilities and stockholders’ equity
Current liabilities:
Accounts payable$8,943 $9,142 
Accrued expenses and other current liabilities65,480 65,921 
Current portion of deferred revenue6,469 6,248 
Advanced billings6,617 6,380 
Operating lease liability, current7,208 5,807 
Total current liabilities94,717 93,498 
Other liabilities7,111 6,018 
Operating lease liability, net of current portion10,711 10,958 
Deferred revenue, net of current portion8,029 7,634 
Deferred tax liability46,414 48,396 
Convertible senior notes635,727 486,440 
Total liabilities802,709 652,944 
Stockholders’ equity:
Class A and Class B common stock25 25 
Additional paid-in capital349,949 502,477 
Accumulated deficit(74,931)(76,867)
Accumulated other comprehensive loss(23,556)(13,040)
Total stockholders’ equity251,487 412,595 
Total liabilities and stockholders’ equity$1,054,196 $1,065,539 
The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.
5


BANDWIDTH INC.
Condensed Consolidated Statements of Operations
(In thousands, except share and per share amounts)
(Unaudited)
Three months ended March 31,
20222021
Revenue$131,364 $113,479 
Cost of revenue75,950 62,321 
Gross profit55,414 51,158 
Operating expenses:
Research and development22,427 16,789 
Sales and marketing23,152 19,110 
General and administrative16,705 15,296 
Total operating expenses62,284 51,195 
Operating loss(6,870)(37)
Other income (expense), net235 (5,611)
Loss before income taxes(6,635)(5,648)
Income tax (provision) benefit(179)332 
Net loss$(6,814)$(5,316)
Net loss per share, basic and diluted$(0.27)$(0.21)
Weighted average number of common shares outstanding, basic and diluted25,220,052 25,015,948 
The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

6


BANDWIDTH INC.
Condensed Consolidated Statements of Comprehensive Loss
(In thousands)
(Unaudited)
Three months ended March 31,
20222021
Net loss$(6,814)$(5,316)
Other comprehensive loss
Foreign currency translation, net of income taxes(10,516)(23,185)
Other comprehensive loss(10,516)(23,185)
Total comprehensive loss$(17,330)$(28,501)

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.
7


BANDWIDTH INC.
Condensed Consolidated Statements of Changes in Stockholders Equity
(In thousands, except share amounts)
(Unaudited)
Class A voting
common stock
Class B voting
common stock
Additional paid-in capitalAccumulated other comprehensive income (loss)Accumulated deficitTotal stockholders’ equity
SharesAmountSharesAmount
Balance at December 31, 202022,413,004 $22 2,496,125 $2 $451,463 $27,941 $(49,505)$429,923 
Issuance of debt conversion option— — — — 66,908 — — 66,908 
Debt conversion option issuance costs, net of tax— — — — (2,049)— — (2,049)
Capped call option purchase price— — — — (25,500)— — (25,500)
Exercises of vested stock options57,817 — — — 753 — — 753 
Vesting of restricted stock units141,707 — — — — — — — 
Equity awards withheld for tax liability(19,879)— — — (3,187)— — (3,187)
Conversion of Class B voting common stock to Class A voting common stock280,955 1 (280,955)— — — — 1 
Foreign currency translation— — — — — (23,185)— (23,185)
Stock-based compensation— — — — 4,390 — — 4,390 
Net loss— — — — — — (5,316)(5,316)
Balance at March 31, 202122,873,604 23 2,215,170 2 492,778 4,756 (54,821)442,738 
Debt conversion option issuance costs, net of tax— — — — 30 — — 30 
Exercises of vested stock options4,406 — — — 46 — — 46 
Vesting of restricted stock units15,605 — — — — — — — 
Equity awards withheld for tax liability(1,948)— — — (265)— — (265)
Foreign currency translation— — — — — 6,015 — 6,015 
Stock-based compensation— — — — 3,377 — — 3,377 
Net loss— — — — — — (6,928)(6,928)
Balance at June 30, 202122,891,667 23 2,215,170 2 495,966 10,771 (61,749)445,013 
Exercises of vested stock options8,700 — — — 101 — — 101 
Vesting of restricted stock units16,383 — — — — — — — 
Equity awards withheld for tax liability(1,631)— — — (154)— — (154)
Conversion of Class B voting common stock to Class A voting common stock250,000 — (250,000)— — — —  
Foreign currency translation— — — — — (12,512)— (12,512)
Stock-based compensation— — — — 3,825 — — 3,825 
Net loss— — — — — — (6,944)(6,944)
Balance at September 30, 202123,165,119 23 1,965,170 2 499,738 (1,741)(68,693)429,329 
Exercises of vested stock options3,062 — — — 23 — — 23 
Vesting of restricted stock units12,807 — — — — — — — 
Equity awards withheld for tax liability(3,000)— — — (229)— — (229)
Foreign currency translation— — — — — (11,468)— (11,468)
Unrealized gain/loss on employee benefit pension plan— — — — — 169 — 169 
Stock-based compensation— — — — 2,945 — — 2,945 
Net loss— — — — — — (8,174)(8,174)
8


BANDWIDTH INC.
Condensed Consolidated Statements of Changes in Stockholders Equity
(In thousands, except share amounts)
(Unaudited)
Class A voting
common stock
Class B voting
common stock
Additional paid-in capitalAccumulated other comprehensive income (loss)Accumulated deficitTotal stockholders’ equity
SharesAmountSharesAmount
Balance at December 31, 202123,177,988 23 1,965,170 2 502,477 (13,040)(76,867)412,595 
Exercises of vested stock options16,095 — — — 125 — — 125 
Vesting of restricted stock units144,977 — — — — — — — 
Equity awards withheld for tax liability(30,029)— — — (1,751)— — (1,751)
Adjustment to opening retained earnings due to adoption of ASU 2020-06— — — — (156,248)— 8,750 (147,498)
Foreign currency translation— — — — — (10,516)— (10,516)
Stock-based compensation— — — — 5,346 — — 5,346 
Net loss— — — — — — (6,814)(6,814)
Balance at March 31, 202223,309,031 $23 1,965,170 $2 $349,949 $(23,556)$(74,931)$251,487 
The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.
9


BANDWIDTH INC.
Condensed Consolidated Statements of Cash Flows
(In thousands)
(Unaudited)
Three months ended March 31,
20222021
Cash flows from operating activities
Net loss$(6,814)$(5,316)
Adjustments to reconcile net loss to net cash (used in) provided by operating activities
Depreciation and amortization9,170 9,043 
Right-of-use asset amortization1,910 1,347 
Amortization of debt discount and issuance costs760 5,186 
Stock-based compensation5,346 4,390 
Deferred taxes and other94 (894)
Changes in operating assets and liabilities:
Accounts receivable, net of allowances(7,416)3,530 
Prepaid expenses and other assets(11,334)573 
Accounts payable11 1,387 
Accrued expenses and other liabilities3,690 (7,866)
Operating right-of-use liability(2,112)(1,371)
Net cash (used in) provided by operating activities(6,695)10,009 
Cash flows from investing activities
Purchase of property and equipment(5,272)(6,781)
Capitalized software development costs(653)(1,103)
Proceeds from sales and maturities of other investments 30,000 
Net cash (used in) provided by investing activities(5,925)22,116 
Cash flows from financing activities
Payments on finance leases(48)(44)
Proceeds from issuance of convertible senior notes 250,000 
Purchase of Capped Call (25,500)
Payment of debt issuance costs (7,000)
Proceeds from exercises of stock options125 738 
Value of equity awards withheld for tax liabilities(1,701)(2,900)
Net cash (used in) provided by financing activities(1,624)215,294 
Effect of exchange rate changes on cash, cash equivalents and restricted cash(1,056)402 
Net (decrease) increase in cash, cash equivalents, and restricted cash(15,300)247,821 
Cash, cash equivalents, and restricted cash, beginning of period332,289 81,437 
Cash, cash equivalents, and restricted cash, end of period$316,989 $329,258 
Supplemental disclosure of cash flow information
Cash paid for interest$472 $525 
Cash paid (refunded) for taxes, net$36 $(394)
Right-of-use assets obtained in exchange for new operating lease liabilities$3,453 $ 
Supplemental disclosure of noncash investing and financing activities
Purchase of property and equipment, accrued but not paid$433 $1,780 
Lease incentive$1,152 $ 
Equity awards withheld for tax liabilities, accrued but not paid$177 $531 
Payment of debt issuance costs, accrued but unpaid$ $659 
The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.
10

BANDWIDTH INC.
Notes to Condensed Consolidated Financial Statements
(Unaudited)

1. Organization and 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 an international 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.
As a result of certain changes in our business during the quarter ended March 31, 2022, the company re-evaluated its segment reporting and determined that one segment was appropriate, rather than the previously reported segments comprising “CPaaS” and “Other”. The primary drivers for this change were the company’s strategic alignment of its operating departments and the sale of legacy businesses. All previously reported segment information has been recast to conform with the one segment structure.

2. Summary of Significant Accounting Policies
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 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 25, 2022.
The condensed consolidated balance sheet as of December 31, 2021, 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 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 2022 or any future period.
Cost Alignment
During the quarter ended March 31, 2022, the Company changed its presentation of certain costs to align with benchmarked definitions of cost of revenue, research and development, sales and marketing, and general and administrative expenses. As part of the benchmarked definitions, the Company has included allocations of facilities and shared IT costs based on employee headcount within the cost of revenue, research and development, sales and marketing, and general and administrative expense categories. Additionally, the product management function is now included in research and development rather than general and administrative as previously reported and the customer billing and collections function and the amortization of acquired customer relationship intangible assets are now included in sales and marketing rather than general and administrative as previously reported. Management believes use of the benchmarked definitions will increase comparability to peers and therefore usability of its financial statements.
11

Notes to Condensed Consolidated Financial Statements (continued)






All periods presented have been conformed to the current definitions of cost of revenue, research and development, sales and marketing, and general and administrative expenses. There was no impact to revenue or net income for any periods presented. The condensed consolidated balance sheets, condensed consolidated statements of changes in stockholders’ equity and condensed consolidated statements of cash flows are not affected by these changes.
The following is a comparison of the change in costs to the prior period:
Three months ended March 31, 2021
As reportedAs previously reported
(In thousands)
Statement of Operations
Cost of revenue$62,321 $61,328 
Research and development16,789 13,333 
Sales and marketing19,110 11,992 
General and administrative15,296 26,863 
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 doubtful accounts, reserve 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, economic and demographic actuarial assumptions related to pension and other postretirement benefit costs and liabilities, estimated cash flows on asset retirement obligation. 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.
Cash and Cash Equivalents
The Company classifies all highly liquid investments with original stated maturities of three months or less from the date of purchase as cash equivalents. Cash deposits are primarily in financial institutions in the United States. However, cash for monthly operating costs of international operations are deposited in banks outside the United States. The Company has a policy of making investments only with commercial institutions that have at least an investment grade credit rating. The Company utilizes money market funds as an investment option and only invests in AAA rated funds.

Restricted Cash
Restricted cash consists primarily of employee withholding tax liability and employee benefits contributions not yet remitted. The Company has classified this asset as a short-term asset in order to match the expected period of restriction.
12

Notes to Condensed Consolidated Financial Statements (continued)






Accounts Receivable and Current Expected Credit Losses
Accounts receivable are stated at realizable value, net of allowances, which includes an allowance for doubtful accounts and a reserve for expected credit losses. The allowance for doubtful accounts 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 bad debts, 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 $1.7 million for uncollectible accounts and customer balances that are disputed was required as of each of March 31, 2022 and December 31, 2021. Refer to Note 4, “Financial Statement Components” to these condensed consolidated financial statements, for a rollforward of the components of the allowances as of March 31, 2022 and December 31, 2021.
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. All amounts are considered collectible and billable. As of March 31, 2022 and December 31, 2021, unbilled receivables were $35.5 million and $31.8 million, respectively.
Concentration of Credit Risk
Financial instruments that are exposed to concentration of credit risk consist primarily of cash and cash equivalents and trade accounts receivable. Cash deposits may be in excess of insured limits. The Company believes that the financial institutions that hold its cash deposits are financially sound and, accordingly, minimal credit risk exists with respect to these balances.
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 doubtful accounts are inherent in accounts receivable. As of March 31, 2022, no individual customer represented more than 10% of the Company’s accounts receivable, net of allowance for doubtful accounts. As of December 31, 2021, one individual customer represented approximately 10%, respectively, of the Company’s accounts receivable, net of allowance for doubtful accounts.
For the three months ended March 31, 2022 and 2021, no individual customer represented more than 10% of the Company’s revenue.
Debt Issuance Costs
The Company incurs debt issuance costs associated with obtaining and entering into credit agreements and issuing convertible notes. These costs customarily include non-refundable structuring fees, commitment fees, up-front fees and syndication expenses. The Company has a policy of deferring and amortizing these costs based on the effective interest method over the term of the credit agreements or the convertible notes, as applicable.
13

Notes to Condensed Consolidated Financial Statements (continued)






Recently Adopted Accounting Standards
In August 2020, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2020-06, Debt - Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging - Contracts in Entity’s Own Equity (Subtopic 815-40), which is intended to address issues identified as a result of the complexity associated with applying GAAP for certain financial instruments with characteristics of liabilities and equity. For convertible instruments, ASU 2020-06 reduces the number of accounting models for convertible debt instruments and convertible preferred stock, and enhances information transparency by making targeted improvements to the disclosures for convertible instruments and EPS guidance on the basis of feedback from financial statement users. ASU 2020-06 is effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2021. Early adoption was permitted, but no earlier than fiscal years beginning after December 15, 2020, including interim periods within those fiscal years. The Company adopted the new guidance on January 1, 2022 using the modified retrospective approach resulting in decreases in accumulated deficit of $8.8 million, additional paid in capital of $156.2 million, and deferred tax liability of $1.0 million. The Company also recorded an increase in the convertible notes balance of $148.4 million as a result of the reversal of the separation of the convertible debt between debt and equity. The adoption of this standard decreased the amount of non-cash interest expense to be recognized in current and future periods as a result of eliminating the discount associated with the equity component. For the three months ended March 31, 2022, the combined interest expense of the Convertible Notes was $6.6 million lower upon the adoption of ASU 2020-06. The number of diluted shares increased as a result of transitioning from the treasury stock method to the as-if converted method but did not change the earnings per share for the three months ended March 31, 2022 and 2021 as the Company incurred a net loss in both reporting periods.
In May 2021, the FASB issued ASU 2021-04, Earnings Per Share (Topic 260), Debt —Modifications and Extinguishments (Subtopic 470-50), Compensation--Stock Compensation (Topic 718), and Derivatives and Hedging--Contracts in Entity’s Own Equity (Subtopic 815-40), which is intended to provide clarity surrounding the treatment for a modification or an exchange of a freestanding equity-classified written call option. The amendments also provide guidance for the recognition and measurement of earnings-per-share (“EPS”) for certain modifications or exchanges of freestanding equity-classified written call options for entities that present EPS. The amendments do not affect a holder’s accounting for freestanding call options. ASU 2021-04 is effective for fiscal years beginning after December 15, 2021, including interim periods within those fiscal years. Early adoption was permitted, including adoption in an interim period. The Company adopted the new guidance on January 1, 2022. The Company did not have any modifications or exchanges of freestanding written call options classified in equity during the reporting period and therefore did not have an impact on its financial statements.
Recent Accounting Pronouncements Not Yet Adopted
The Company did not have any applicable recent accounting pronouncements not yet adopted.

3. Fair Value Measurements
The carrying amounts of cash and cash equivalents, accounts receivable, accounts payable and accrued expenses approximate fair value as of March 31, 2022 and December 31, 2021 because of the relatively short duration of these instruments.
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.
14

Notes to Condensed Consolidated Financial Statements (continued)






The following table summarizes the assets measured at fair value as of March 31, 2022 and December 31, 2021:
Fair value measurements on a recurring basis
March 31, 2022
Level 1Level 2Level 3Total
(In thousands)
Financial assets:
Cash and cash equivalents:
Money market account$230,003 $ $ $230,003 
Total financial assets$230,003 $ $ $230,003 
Fair value measurements on a recurring basis
December 31, 2021
Level 1Level 2Level 3Total
(In thousands)
Financial assets:
Cash and cash equivalents:
Money market account$241,157 $ $ $241,157 
Total financial assets$241,157 $ $ $241,157 
As of March 31, 2022, the fair value of the 2026 Convertible Notes and 2028 Convertible Notes, as further described in Note 8, “Debt”, was approximately $309.5 million and $164.8 million, respectively. As of December 31, 2021, the fair value of the 2026 Convertible Notes and the 2028 Convertible Notes was approximately $427.1 million and $194.2 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.

4. Financial Statement Components
Accounts receivable, net of allowances consist of the following:
As of March 31,As of December 31,
20222021
(In thousands)
Trade accounts receivable$32,256 $31,036 
Unbilled accounts receivable35,515 31,786 
Allowance for doubtful accounts and reserve for expected credit losses
(1,680)(1,661)
Other accounts receivable2,736 411 
Total accounts receivable, net$68,827 $61,572 

Components of allowance for doubtful accounts and reserve for expected credit losses are as follows:
15

Notes to Condensed Consolidated Financial Statements (continued)






Three months ended March 31,
20222021
(In thousands)
Allowance for doubtful accounts:
Balance, beginning of period$(1,661)$(1,203)
Charged to bad debt expense(141)(48)
Deductions (1)111 10