Bandwidth Inc. Announces Proposed Private Offering of $275 Million of Convertible Senior Notes (Form 8-K)

Bandwidth Inc. Announces Proposed Private Offering of
$275 Million of Convertible Senior Notes

RALEIGH, NC - June 15, 2026 - Bandwidth Inc. (NASDAQ: BAND) ("Bandwidth"), a leading global cloud communications company, today announced that it intends to offer and sell, subject to market and other conditions, $275 million aggregate principal amount of Convertible Senior Notes due 2032 (the "Notes") in a private offering (the "Offering") to qualified institutional buyers pursuant to Rule 144A under the Securities Act of 1933, as amended (the "Securities Act"). Bandwidth also expects to grant the initial purchasers of the Notes a 13-day option to purchase up to an additional $41.25 million aggregate principal amount of the Notes solely to cover over-allotments.

The Notes will be senior, unsecured obligations of Bandwidth, and interest will be payable semi-annually in arrears. The Notes will be convertible into cash, shares of Bandwidth's Class A common stock or a combination thereof, at Bandwidth's election. The interest rate, initial conversion rate and other terms of the Notes are to be determined upon pricing of the Offering.

Bandwidth intends to use a portion of the net proceeds from the Offering to pay the cost of the capped call transactions described below. Bandwidth expects to use up to $10 million of the net proceeds from the Offering to repurchase shares of its Class A common stock concurrently with the pricing of the Offering in privately negotiated transactions effected with or through one of the initial purchasers of the Notes or its affiliate. These repurchases could increase (or reduce the size of any decrease in) the market price of Bandwidth's Class A common stock or the Notes, and this activity could affect the market price of Bandwidth's Class A common stock prior to, concurrently with or shortly after the pricing of the Notes, and could result in a higher effective conversion price for the Notes. Bandwidth expects to use a portion of the net proceeds from the Offering to repurchase a portion of its outstanding 0.50% convertible senior notes due 2028 (the "2028 Notes") concurrently with the pricing of the Offering in privately negotiated transactions effected through one of the initial purchasers of the Notes or its affiliate, as Bandwidth's agent. Bandwidth intends to use the remainder of the net proceeds to repay outstanding amounts under its credit facility and for working capital or other general corporate purposes.

In connection with the pricing of the Notes, Bandwidth expects to enter into one or more privately negotiated capped call transactions with certain of the initial purchasers of the Notes or their respective affiliates and/or other financial institutions (the "Option Counterparties"). The capped call transactions are expected generally to reduce the potential dilution to Bandwidth's Class A common stock upon any conversion of the Notes and/or to offset any cash payments Bandwidth is required to make in excess of the principal amount of the converted Notes, as the case may be, upon any conversion of Notes, with such reduction and/or offset subject to a cap. If the initial purchasers of the Notes exercise their option to purchase additional Notes, Bandwidth expects to enter into additional capped call transactions with the Option Counterparties.

Bandwidth expects that, in connection with establishing their initial hedges of the capped call transactions, the Option Counterparties or their respective affiliates expect to purchase shares of Bandwidth's Class A common stock and/or enter into various derivative transactions with respect to Bandwidth's Class A common stock concurrently with or shortly after the pricing of the Notes. This activity could increase (or reduce the size of any decrease in) the market price of Bandwidth's Class A common stock or the Notes at that time. In addition, Bandwidth expects that the Option Counterparties or their respective affiliates may modify their hedge positions by entering into or unwinding various derivatives with respect to the Class A common stock and/or by purchasing or selling shares of Bandwidth's Class A common stock or other securities of Bandwidth in secondary market transactions following the pricing of the Notes and from time to time prior to the maturity of the Notes (and are likely to do so (x) during any observation period related to a conversion of the Notes or following any repurchase of the Notes by Bandwidth in connection with any redemption or fundamental change, (y) following any repurchase of the Notes by Bandwidth

other than in connection with any redemption or fundamental change if Bandwidth elects to unwind a corresponding portion of the capped call transactions in connection with such repurchase and (z) if Bandwidth otherwise unwinds all or a portion of the capped call transactions). This activity could also cause or avoid an increase or a decrease in the market price of Bandwidth's Class A common stock or the Notes, which could affect the ability of holders of the Notes to convert the Notes and, to the extent the activity occurs during any observation period related to a conversion of the Notes, it could affect the number of shares of Class A common stock and value of the consideration that holders of the Notes will receive upon conversion of the Notes.

In connection with Bandwidth's intended repurchase of a portion of its outstanding 2028 Notes concurrently with the pricing of the Offering as described above, Bandwidth expects that some or all of the holders of the 2028 Notes that it repurchases may purchase shares of Bandwidth's Class A common stock in open market transactions to unwind hedge positions that such holders have with respect to their investment in the 2028 Notes. These open market purchases, in turn, may place upward pressure on the trading price of Bandwidth's Class A common stock, causing its Class A common stock to trade at higher prices than would be the case in the absence of these purchases, which could result in a higher effective conversion price for the Notes.

The Notes will be offered only to persons reasonably believed to be qualified institutional buyers pursuant to Rule 144A under the Securities Act. The offer and sale of the Notes and the shares of Bandwidth's Class A common stock potentially issuable upon conversion of the Notes, if any, have not been, and will not be, registered under the Securities Act or the securities laws of any other jurisdiction, and unless so registered, the Notes and such shares, if any, may not be offered or sold in the United States except pursuant to an applicable exemption from such registration requirements.

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