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Bandwidth Inc (BAND)
NASDAQ:BAND
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Bandwidth
(NASDAQ:BAND)60Neutral
Positive Factors
Financial Performance
Bandwidth delivered strong fourth-quarter results, with revenue growth excluding political contributions surpassing expectations.
Market Position
Bandwidth offers a leading global cloud communications platform, with coverage of 65+ countries and is well positioned to power voice AI applications.
Negative Factors
Financial Guidance
Revenue guidance for 2025 was lighter than anticipated, missing consensus expectations by about $11 million.
Bandwidth (BAND) vs. S&P 500 (SPY)
Market Cap
$434.22M
Dividend YieldN/A
Average Volume (3M)340.44K
Price to Earnings (P/E)―
Beta (1Y)2.31
Revenue Growth24.52%
EPS Growth61.08%
CountryUS
Employees1,100
SectorTechnology
Sector Strength48
IndustrySoftware
Share Statistics
EPS (TTM)-0.26
Shares Outstanding26,665,745
10 Day Avg. Volume480,525
30 Day Avg. Volume340,438
Financial Highlights & Ratios
PEG RatioN/A
Price to Book (P/B)N/A
Price to Sales (P/S)0.58
Price to Cash Flow (P/CF)3.00
P/FCF Ratio3.50
Enterprise Value/Market CapN/A
Enterprise Value/RevenueN/A
Enterprise Value/Gross ProfitN/A
Enterprise Value/EbitdaN/A
Forecast
1Y Price Target
$24.00Price Target Upside57.27% Upside
Rating ConsensusModerate Buy
Number of Analyst Covering6
Bandwidth Business Overview & Revenue Model
Company DescriptionBandwidth, Inc. provides cloud-based communications services. It offers data Internet, voice/voice over Internet protocol, messaging. managed network, and conferencing services. The firm serves the telecom needs of small and medium businesses. It operates through the following business segments: CPaaS and Other. The CPaaS segment includes software-powered communication platform such as, voice calling and messaging services. The Other Segment provides legacy services. The company was founded by Henry Kaestner and David Morken in 1999 and is headquartered in Raleigh, NC.
How the Company Makes MoneyBandwidth makes money through a variety of revenue streams, primarily by charging customers for access to its communication platform services. These include fees for voice calling, messaging, and emergency services, typically billed based on usage. The company also generates revenue through subscription models for access to its APIs, which allow businesses to integrate communication functionalities into their applications. Additionally, Bandwidth partners with other technology and telecommunications companies to extend its reach and capabilities, often entering into revenue-sharing agreements. Significant revenue is also generated from enterprise clients that require large-scale and customized communication solutions, further contributing to Bandwidth's earnings.
Bandwidth Financial Statement Overview
Summary
Bandwidth shows strong revenue growth and improving cash flow metrics. However, profitability issues and high leverage remain concerns, indicating a need for better debt management and profitability enhancement.Income Statement
Bandwidth's revenue has shown strong growth with a 24.5% increase from 2023 to 2024, alongside a rising gross profit margin indicating improved cost management. However, consistent net losses and negative EBIT and EBITDA margins highlight ongoing profitability challenges.65
Positive
Balance Sheet
The company's debt-to-equity ratio has improved slightly but remains high at 1.61, indicating significant leverage. While stockholders' equity has increased, the return on equity is negative due to net losses, suggesting inefficient use of equity capital. The equity ratio is stable, reflecting a balanced asset base.55
Neutral
Cash Flow
Free cash flow has significantly improved, with a notable increase in operating cash flow to net income ratio, suggesting better cash generation from operations. Despite this, high capital expenditures and fluctuating financing cash flows pose challenges to long-term cash sustainability.70
Positive
| Breakdown | ||||
| Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 | Dec 2020 |
|---|---|---|---|---|
| Income Statement | Total Revenue | |||
| 748.49M | 601.12M | 573.15M | 490.91M | 343.11M | Gross Profit |
| 279.96M | 236.16M | 238.35M | 218.52M | 157.86M | EBIT |
| -20.06M | -35.46M | -24.32M | -2.24M | -13.51M | EBITDA |
| 42.15M | 32.55M | 62.93M | 34.23M | 8.11M | Net Income Common Stockholders |
| -6.52M | -16.34M | 19.57M | -27.36M | -43.98M |
| Balance Sheet | Cash, Cash Equivalents and Short-Term Investments | |||
| 83.79M | 153.47M | 184.87M | 331.45M | 112.16M | Total Assets |
| 989.17M | 1.10B | 929.32M | 1.07B | 890.61M | Total Debt |
| 503.59M | 644.54M | 492.64M | 503.20M | 304.91M | Net Debt |
| 421.77M | 512.55M | 379.00M | 171.75M | 232.75M | Total Liabilities |
| 676.63M | 803.66M | 657.14M | 652.94M | 460.69M | Stockholders Equity |
| 312.53M | 297.39M | 272.18M | 412.60M | 429.92M |
| Cash Flow | Free Cash Flow | |||
| 69.90M | 19.10M | -29.18M | -13.83M | -10.07M | Operating Cash Flow |
| 83.88M | 39.00M | 34.91M | 40.80M | 4.52M | Investing Cash Flow |
| -1.44M | 30.85M | -133.45M | 2.83M | -455.08M | Financing Cash Flow |
| -131.27M | -52.77M | -120.00M | 207.03M | 346.89M |
Bandwidth Technical Analysis
Negative
15.26
Price Trends
17.15
Negative
18.14
Negative
18.11
Negative
Market Momentum
-0.61
Positive
31.19
Neutral
16.11
Positive
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For BAND, the sentiment is Negative. The current price of 15.26 is below the 20-day moving average (MA) of 17.40, below the 50-day MA of 17.15, and below the 200-day MA of 18.11, indicating a bearish trend. The MACD of -0.61 indicates Positive momentum. The RSI at 31.19 is Neutral, neither overbought nor oversold. The STOCH value of 16.11 is Positive, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for BAND.
Bandwidth Risk Analysis
Bandwidth disclosed 72 risk factors in its most recent earnings report. Bandwidth reported the most risks in the “Finance & Corporate” category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 0 New Risks
Bandwidth Peers Comparison
Overall Rating
UnderperformOutperform
Sector (59)
Financial Indicators
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
73 Outperform | $22.64B | 23.40 | 11.31% | ― | 3.05% | 55.96% | |
68 Neutral | $17.52B | ― | -1.38% | ― | 7.32% | 88.51% | |
66 Neutral | $2.53B | ― | -2.06% | ― | 14.44% | 84.58% | |
60 Neutral | $434.22M | ― | -2.09% | ― | 24.52% | 61.08% | |
60 Neutral | $2.49B | ― | 16.58% | ― | 8.99% | 63.84% | |
59 Neutral | $22.39B | 11.53 | -18.05% | 2.31% | 5.00% | -25.89% | |
51 Neutral | $312.11M | ― | -40.78% | ― | -2.23% | 19.48% |
* Technology Sector Average
Performance Comparison
BAND
Bandwidth
15.26
-4.20
-21.58%
EGHT
8X8
2.37
-0.39
-14.13%
RNG
RingCentral
27.97
-4.32
-13.38%
FIVN
Five9
34.34
-22.54
-39.63%
TWLO
Twilio
116.76
58.20
99.39%
ZM
Zoom Video Communications
75.60
9.18
13.82%
Bandwidth Earnings Call Summary
Earnings Call Date: Feb 20, 2025 | % Change Since: -16.48% | Next Earnings Date: Apr 30, 2025
Earnings Call Sentiment Positive
The earnings call highlights Bandwidth's strong financial performance in 2024, with significant growth in revenue, EBITDA, and gross margins. The company is capitalizing on AI and innovation initiatives, positioning itself well for future growth. However, the non-recurrence of political campaign revenue presents a challenge for 2025, along with expected flat revenue growth in Q1. The positive aspects outweigh the challenges, leading to an overall positive sentiment.Highlights
Strong Financial Performance
Bandwidth reported a 27% increase in Q4 2024 revenue to $210 million and a 25% increase in EBITDA to $23 million. For the full year, total revenue reached $748 million, a 25% increase year-over-year, with a significant 70% increase in EBITDA to $82 million.
Record Non-GAAP Gross Margins
The company achieved record annual non-GAAP gross margins, improving to 58% in Q4, which is a three-percentage point increase.
Growth in Enterprise Revenue
Enterprise revenue grew by 29% year-over-year, driven by strong demand within key verticals.
AI and Innovation Initiatives
Bandwidth's Maestro platform and AIBridge software are driving new opportunities in voice AI, with hundreds of enterprises utilizing these platforms.
Successful Global Rollout
The company successfully rolled out its universal platform globally, supporting enterprise communications transformation.
Lowlights
Dependency on Political Campaign Revenue
2024 saw $62 million in revenue from political campaign messaging, which will not recur in 2025, potentially affecting revenue growth.
Flat Revenue Growth in Q1 2025
Q1 2025 revenue guidance is relatively flat year-over-year, with expected surcharges to be lower due to the absence of political campaign messaging.
Company Guidance
During the Bandwidth Fourth Quarter and Full Year 2024 Earnings Conference Call, the company provided robust financial guidance for 2025, highlighting expected total revenue between $740 million and $760 million, reflecting an 8% to 11% growth when normalized for 2024 political campaign revenue. The fourth quarter of 2024 showed a 27% increase in total revenue to $210 million, with 15% year-over-year growth in cloud communications revenue. The company achieved a record annual non-GAAP gross margin of 57% and a net retention rate of 122%. Bandwidth's enterprise voice revenue grew by 29% year-over-year, driven by the adoption of its Maestro platform and strong demand in key verticals. For 2025, the company anticipates continued EBITDA growth, projecting it to reach $86 million at the midpoint, with a focus on strategic investments in AI and maintaining a strong capital structure.Bandwidth Corporate Events
Executive/Board ChangesBusiness Operations and Strategy
Bandwidth Appoints Devesh Agarwal as New COO
Positive
Jan 2, 2025
Bandwidth Inc. announced the appointment of Devesh Agarwal as Chief Operating Officer, effective January 1, 2025. Agarwal, who has significant experience in the technology sector, will lead the company’s growth and innovation efforts, including the execution of Bandwidth’s strategy, global customer engagement, and operational excellence. His appointment is accompanied by a modification in his compensation package, with an increase in salary and target incentive amount. Agarwal’s leadership is expected to strengthen Bandwidth’s market position and drive further growth, delivering exceptional value to customers.
Glossary
OutperformA stock rated as "Outperform" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock is likely to deliver higher returns compared to the average returns of other stocks in the same sector or market index. Investors might consider this stock a good buying opportunity.
NeutralA stock rated as "Neutral" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly attractive nor unattractive for investment. Investors may consider holding onto the stock, as it is not expected to either significantly outperform or underperform the market.
UnderperformA stock rated as "Underperform" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock may deliver lower returns compared to the average returns of other stocks in the same sector or market index. Investors might consider selling the stock or avoiding it as an investment.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.