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Bandwidth Inc (BAND)
NASDAQ:BAND
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Bandwidth
(NASDAQ:BAND)
64Neutral
Positive Factors
Financial Performance
Bandwidth delivered solid first-quarter results and raised the low end of its full-year revenue guidance by $5 million.
Growth Prospects
The combination of ramping FCF/EBITDA margins with a secular tailwind for voice applications in customer service will support ongoing growth in Enterprise Voice, which is margin accretive to the company.
Market Position
Bandwidth trades at a slight discount to the communications SaaS comp group, presenting a favorable risk/reward profile.
Negative Factors
Financial Guidance
1Q25 guidance was below consensus.
Guidance
Revenue guidance for 2025 was lighter than anticipated, missing consensus expectations by about $11 million.
Revenue Performance
Guidance was mixed but skewed negative with 1Q adj. EBITDA of $16M-$18M on revenue of $168M-$170M, down 1% y/y at the midpoint.
Bandwidth (BAND) vs. S&P 500 (SPY)
Market Cap
$364.87M
Dividend YieldN/A
Average Volume (3M)281.92K
Price to Earnings (P/E)―
Beta (1Y)1.81
Revenue Growth18.51%
EPS Growth97.57%
CountryUS
Employees1,100
SectorTechnology
Sector Strength66
IndustrySoftware - Infrastructure
Share Statistics
EPS (TTM)0.36
Shares Outstanding27,754,915
10 Day Avg. Volume241,668
30 Day Avg. Volume281,922
Financial Highlights & Ratios
PEG RatioN/A
Price to Book (P/B)N/A
Price to Sales (P/S)0.00
Price to Cash Flow (P/CF)0.00
P/FCF Ratio0.00
Enterprise Value/Market Cap2.45
Enterprise Value/RevenueN/A
Enterprise Value/Gross Profit3.19
Enterprise Value/EbitdaN/A
Forecast
1Y Price Target
$19.83Price Target Upside43.07% Upside
Rating ConsensusModerate Buy
Number of Analyst Covering7
Bandwidth Business Overview & Revenue Model
Company DescriptionBandwidth Inc. operates as a cloud-based software-powered communications platform-as-a-service (CPaaS) provider in the United States. The company operates in two segments, CPaaS and Other. Its platform enables enterprises to create, scale, and operate voice or messaging communications services across various mobile applications or connected devices. The company also provides SIP trunking, data resale, and hosted voice over Internet protocol services. It serves large enterprises, communications service providers, conferencing providers, contact centers, small and medium-sized businesses, emerging technology companies, and many other businesses. Bandwidth Inc. was founded in 2000 and is headquartered in Raleigh, North Carolina.
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, it faces ongoing profitability challenges and high leverage, which are significant concerns for financial stability.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.―
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
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.―
| 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
Positive
13.86
Price Trends
13.65
Positive
15.61
Negative
16.92
Negative
Market Momentum
-0.23
Negative
59.17
Neutral
45.72
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For BAND, the sentiment is Positive. The current price of 13.86 is above the 20-day moving average (MA) of 12.38, above the 50-day MA of 13.65, and below the 200-day MA of 16.92, indicating a neutral trend. The MACD of -0.23 indicates Negative momentum. The RSI at 59.17 is Neutral, neither overbought nor oversold. The STOCH value of 45.72 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for BAND.
Bandwidth Risk Analysis
Bandwidth disclosed 71 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 (60)
Financial Indicators
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
69 Neutral | $342.83M | ― | -114.48% | ― | 2.02% | 36.61% | |
66 Neutral | $379.78M | 6.90 | 39.27% | ― | 1.61% | 0.05% | |
64 Neutral | $364.87M | ― | -0.32% | ― | 18.51% | 97.57% | |
64 Neutral | $423.94M | 4.70 | -94.58% | ― | -2.75% | -4.13% | |
60 Neutral | $10.83B | 10.36 | -6.71% | 2.99% | 7.73% | -13.59% | |
50 Neutral | $308.79M | ― | 24.92% | ― | ― | ― | |
47 Neutral | $327.48M | ― | 81.52% | ― | -7.44% | 0.63% |
* Technology Sector Average
Performance Comparison
BAND
Bandwidth
13.86
-7.66
-35.59%
IMXI
International Money Express
10.85
-10.27
-48.63%
RXT
Rackspace Technology
1.44
-0.52
-26.53%
KLTR
Kaltura
2.18
0.94
75.81%
CCSI
Consensus Cloud Solutions
22.38
4.38
24.33%
GRRR
Gorilla Technology Group Inc.
15.14
9.26
157.48%
Bandwidth Earnings Call Summary
Earnings Call Date:May 07, 2025
(Q1-2025)
| % Change Since: 12.87%|
Next Earnings Date:Jul 31, 2025
Earnings Call Sentiment Positive
Bandwidth's first-quarter performance was strong, with significant growth in revenue, particularly in Enterprise Voice and Global Voice Plans. The company successfully expanded its channel program and AI integrations, raising full-year guidance. However, there are concerns about slower growth in Programmable Messaging and macroeconomic volatility.Q1-2025 Updates
Positive Updates
Exceeding Top and Bottom Line Expectations
Bandwidth reported a strong start to 2025, with revenue and adjusted EBITDA exceeding the high end of their guidance. Revenue grew by 7% year-over-year to $174 million, and EBITDA increased by 40% to $22 million.
Enterprise Voice Growth and Key Wins
Enterprise Voice revenue grew by 26% year-over-year, driven by strong demand from financial services and healthcare sectors. Over half of enterprise customers are now utilizing the Maestro or AI Bridge platforms.
Expansion in Global Voice Plans
Global Voice Plans revenue grew 4% year-over-year, with new partnerships and expansions with existing clients like Microsoft and Zoom. The company expects this category to double its growth rate from last year.
Raising Full Year Guidance
The company raised its full-year revenue outlook to $745 million to $760 million, reflecting an increased organic growth outlook of 10% at the midpoint.
Successful Channel Expansion
Bandwidth expanded its channel program, securing multimillion dollar deals and expanding partnerships with MSPs and system integrators, contributing to significant enterprise transformations.
AI Integration and Innovation
Bandwidth's AI strategy is contributing to growth, with the Maestro AI Bridge simplifying the integration of AI voice solutions into existing workflows, leading to increased efficiency and customer satisfaction.
Awards and Recognitions
Bandwidth earned two Gold Stevie awards for innovation in customer service and customer engagement initiatives, reflecting their commitment to customer-centric operations.
Negative Updates
Concerns in Programmable Messaging Growth
Programmable Messaging saw a 9% year-over-year increase, which is slower compared to other segments. The company acknowledged potential macroeconomic impacts on this segment, particularly in retail and e-commerce.
Macroeconomic Volatility Concerns
There are concerns about macroeconomic volatility and its potential impact on business operations, although it hasn’t yet materialized significantly for Bandwidth.
Company Guidance
In the first quarter of 2025, Bandwidth Inc. reported strong financial performance, surpassing both revenue and adjusted EBITDA expectations. The company recorded a total revenue of $174 million, marking a 7% year-over-year increase when normalized for cyclical political campaign revenue from 2024. Cloud communications revenue specifically grew by 6% year-over-year, also normalized for political campaign impacts. The non-GAAP gross profit reached $79 million, representing an 8% increase year-over-year, or 11% when adjusted for political revenue. Bandwidth's non-GAAP gross margin improved to 59%, a two-percentage-point increase, while EBITDA grew by 40% to $22 million. The company raised its full-year revenue outlook to a range of $745 million to $760 million, reflecting an increased organic growth outlook of 10% at the midpoint. The financial results were driven by strong demand in the enterprise voice, global voice plans, and programmable messaging segments, with notable traction in sectors like healthcare and financial services. The net retention rate stood at 116%, with customer name retention well above 99%, and the average annual revenue per customer reached a record $228,000.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.