Revenue of $234 million beat the API Ninjas estimate of $233.1 million by 0.4%, and non-GAAP EPS of $0.50 beat the $0.47 estimate by 6.1%.
Full-year guidance moved up at the midpoint on every metric: total revenue $905-910 million, cloud communications $624-626 million, adjusted EBITDA $124-125 million and non-GAAP EPS $1.73-$1.79 - with commercial cloud communications raised $4 million and political campaign revenue trimmed $3 million to $10 million.
Profit compounded faster than revenue: adjusted EBITDA grew 43% to $35 million on 22% revenue growth, a record 22% margin, and free cash flow of $33 million rose more than 150% to 21% of cloud communications revenue.
Software services, $7 million of revenue and about 5% of cloud communications, grew 68% and exited the quarter above a $30 million ARR rate, more than double nine months earlier.
The one thing that matters: headline 22% revenue growth is largely pass-through messaging surcharge. Cloud communications grew 12%, and its $450 million Global Voice Plans base is a 3-8% grower management does not expect to accelerate - so the 2027 double-digit case rests on Enterprise Voice and roughly $19 million of signed ACV barely in the forecast.
Guidance & KPIs
Item
New guidance
Prior guidance
Full year 2026 total revenue
$905 million-$910 million
—
Full year 2026 cloud communications revenue
$624 million-$626 million
—
Full year 2026 adjusted EBITDA
$124 million-$125 million
—
Full year 2026 non-GAAP EPS
$1.73-$1.79
—
Full year 2026 political campaign revenue
$10 million
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Management commentary
Management called the fourth quarter the turning point in this year's growth rates and said it has growing confidence in double-digit cloud communications growth in fiscal 2027 even as it laps political messaging revenue.
Enterprise Voice is expected to grow greater than 20% in the fourth quarter, with commensurate and growing rates through 2027.
Global Voice Plans was described as a very large base, about $450 million, that is not expected to accelerate meaningfully above market rates of 3% to 8% in the next few quarters.
On Salesforce, management said the collaboration now extends to more than 25 countries and that exiting 2028 as its largest customer would require roughly a $20 million annual run rate, a ramp that has to begin through 2027; Salesforce is not in the 2026 outlook.
Pressed on guidance credibility, the CFO pointed to the annual planning process that has produced "36 straight quarters of achieving or exceeding guidance".
Quality of earnings
The beat is operational, not cosmetic. Adjusted EBITDA grew 43% to $35 million on 22% revenue growth, lifting margin to a record 22%, with non-GAAP gross profit up 18% to $96 million on roughly 86% gross profit yield on cloud communications growth.
Cash backs the earnings. Free cash flow of $33 million ran well ahead of non-GAAP net income of $20 million and funded $10 million of share repurchases plus $21 million of 2028 convertible principal retired at a discount, taking net leverage to 1.3 times from 1.6 times.
The two gross margins moved opposite ways for a benign reason. GAAP gross margin fell 200 basis points to 36% solely on higher carrier messaging surcharge revenue, which passes through at no margin, while non-GAAP gross margin improved nearly 300 basis points to 60.6%.
Gotchas & watch items
The growth rate is flattered by pass-through: total revenue grew 22% but cloud communications, which strips messaging surcharges, grew 12% - and about $3 million of that came from political campaign messaging that does not repeat in 2027.
Underlying voice demand is better than the segment line reads: Voice revenue grew 9% in total, but Enterprise Voice grew 15% and is guided above 20% growth in the fourth quarter, held back by a $450 million Global Voice Plans base management pegs to 3-8% market rates.
Signed business is not yet in the numbers: 11 deals above $1 million of ACV closed in nine months carry nearly $19 million of annual contract value, which management says has contributed very little to results or forecast and ramps into mid-2027.
The balance sheet quietly improved: $21 million of 2028 convertible principal was repurchased at a discount leaving about $7 million outstanding, and the undrawn revolver was upsized to $200 million with maturity extended to October 2031.
Last quarter's watch items: what happened
No watch items on file from a prior quarter - this is the first tracked quarter for this company.
Next quarter: the 2-3 things that matter
Enterprise Voice clearing the guided 20%-plus growth rate Baseline: Enterprise Voice grew 15% in Q3 2026; guided to greater than 20% growth in Q4 2026 Confirms: Q4 Enterprise Voice growth above 20% and full-year cloud communications revenue at or above $624 million Breaks: Q4 Enterprise Voice growth at or below 15%, or full-year cloud communications below $624 million Check in: Q4 2026. Source: CFO remarks on the Q3 2026 call: Enterprise Voice expected to grow greater than 20% in the fourth quarter
Conversion of signed million-dollar-plus deals into reported revenue Baseline: 11 deals above $1 million of ACV signed in the first nine months of 2026, nearly $19 million of annual contract value, very little of it in results or forecast Confirms: Deal count above 11 and cloud communications growth guided at double digits for 2027 with the ACV ramping as described Breaks: 2027 cloud communications growth guided below 10%, or the ACV ramp slipping beyond mid-2027 Check in: Q4 2026. Source: CFO remarks on the Q3 2026 call: almost $19 million of annual contract value from 11 customers in nine months
Software services ARR holding its sequential pace Baseline: Software services revenue of $7 million in Q3 2026, up 68%, exiting the quarter above a $30 million ARR rate and about 5% of cloud communications revenue Confirms: ARR above $34 million exiting Q4 2026 with software services revenue still growing faster than cloud communications Breaks: ARR flat or lower than $30 million exiting Q4 2026 Check in: Q4 2026. Source: CFO remarks on the Q3 2026 call: exited the quarter at an ARR rate of over $30 million