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Bandwidth Inc (BAND)
NASDAQ:BAND
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Bandwidth
(NASDAQ:BAND)
Rating:61Neutral
Price Target:
$15.00
▲(9.01%Upside)
Positive Factors
Financial Performance
Bandwidth delivered solid first-quarter results and raised the low end of its full-year revenue guidance by $5 million.
Market Position
Bandwidth trades at a slight discount to the communications SaaS comp group, presenting a favorable risk/reward profile.
Voice AI Applications
Bandwidth is expected to be a key beneficiary as more enterprises adopt Voice AI applications for customer support and other use cases, with their volume units continuing to scale.
Negative Factors
Initial 1Q25 Guidance
1Q25 guidance was below consensus.
Mixed Guidance
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.
Revenue Guidance
Revenue guidance for 2025 was lighter than anticipated, missing consensus expectations by about $11 million.
Bandwidth (BAND) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$409.54M
Dividend YieldN/A
Average Volume (3M)267.36K
Price to Earnings (P/E)―
Beta (1Y)1.74
Revenue Growth18.51%
EPS Growth97.57%
CountryUS
Employees1,100
SectorTechnology
Sector Strength78
IndustrySoftware - Infrastructure
Share Statistics
EPS (TTM)0.36
Shares Outstanding27,804,888
10 Day Avg. Volume274,434
30 Day Avg. Volume267,358
Financial Highlights & Ratios
PEG Ratio-0.17
Price to Book (P/B)2.13
Price to Sales (P/S)0.00
P/FCF Ratio-19.88
Enterprise Value/Market Cap2.34
Enterprise Value/Revenue0.33
Enterprise Value/Gross Profit3.42
Enterprise Value/Ebitda7.53
Forecast
1Y Price Target
$20.75Price Target Upside50.80% Upside
Rating ConsensusModerate Buy
Number of Analyst Covering6
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 Inc. generates revenue primarily through its CPaaS offerings, where it charges customers based on usage for voice, messaging, and emergency services. The company operates a consumption-based model, meaning revenue is directly tied to the volume of communication services used by its clients. Key revenue streams include fees for voice minutes, text message volumes, and access to emergency services infrastructure. Bandwidth also earns from providing phone numbers and associated services. Strategic partnerships with carriers and technology platforms help expand its service reach and customer base, contributing to its earnings. Additionally, Bandwidth benefits from long-term contracts with some clients, which provide a predictable revenue stream.
Bandwidth Earnings Call Summary
Earnings Call Date:May 07, 2025
(Q1-2025)
| % Change Since: 12.05%|
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 Financial Statement Overview
Summary
Bandwidth demonstrates strong revenue growth and efficient cash flow management. However, ongoing challenges in achieving profitability and high leverage levels could impact financial stability. The company's focus on improving margins and reducing leverage will be critical for sustaining growth and enhancing shareholder value.Income Statement
Bandwidth's income statement shows healthy revenue growth with a TTM revenue of $751.7M, up from $748.5M in the previous year. Gross profit margin remains stable at approximately 37.3%, reflecting efficient cost management. However, the company is struggling with profitability, as indicated by negative net income and EBIT margins, signaling potential challenges in achieving sustainable profitability.65
Positive
Balance Sheet
The balance sheet indicates a moderate financial position. The debt-to-equity ratio is relatively high at 1.39, reflecting significant leverage. Stockholders' equity has grown to $345.4M, contributing to an improved equity ratio of 35.8%. While the increase in equity is favorable, high leverage poses a risk in terms of financial stability.60
Neutral
Cash Flow
Cash flow analysis shows robust operating cash flow of $77.98M in the TTM, supporting a healthy free cash flow of $52.1M. The operating cash flow to net income ratio is strong, highlighting effective cash generation from operations despite negative net income. This provides a cushion for debt servicing and operational needs.70
Positive
| Breakdown | |||||
| TTM | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 | Dec 2020 |
|---|---|---|---|---|---|
| Income Statement | Total Revenue | ||||
| 751.70M | 748.49M | 601.12M | 573.15M | 490.91M | 343.11M | Gross Profit |
| 280.31M | 279.96M | 236.16M | 238.35M | 218.52M | 157.86M | EBIT |
| -14.33M | -20.06M | -35.46M | -24.32M | -2.24M | -13.51M | EBITDA |
| 36.33M | 42.15M | 32.55M | 62.93M | 34.23M | 8.11M | Net Income Common Stockholders |
| -1.03M | -6.52M | -16.34M | 19.57M | -27.36M | -43.98M |
| Balance Sheet | Cash, Cash Equivalents and Short-Term Investments | ||||
| 41.69M | 83.79M | 153.47M | 184.87M | 331.45M | 112.16M | Total Assets |
| 964.37M | 989.17M | 1.10B | 929.32M | 1.07B | 890.61M | Total Debt |
| 479.19M | 503.59M | 644.54M | 492.64M | 503.20M | 304.91M | Net Debt |
| 443.25M | 421.77M | 512.55M | 379.00M | 171.75M | 232.75M | Total Liabilities |
| 618.97M | 676.63M | 803.66M | 657.14M | 652.94M | 460.69M | Stockholders Equity |
| 345.41M | 312.53M | 297.39M | 272.18M | 412.60M | 429.92M |
| Cash Flow | Free Cash Flow | ||||
| 52.10M | 69.90M | 19.10M | -29.18M | -13.83M | -10.07M | Operating Cash Flow |
| 77.98M | 83.88M | 39.00M | 34.91M | 40.80M | 4.52M | Investing Cash Flow |
| 11.72M | -1.44M | 30.85M | -133.45M | 2.83M | -455.08M | Financing Cash Flow |
| -158.15M | -131.27M | -52.77M | -120.00M | 207.03M | 346.89M |
Bandwidth Technical Analysis
Negative
13.76
Price Trends
13.40
Positive
14.84
Negative
16.45
Negative
Market Momentum
0.22
Positive
44.74
Neutral
29.26
Neutral
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 13.76 is below the 20-day moving average (MA) of 14.37, above the 50-day MA of 13.40, and below the 200-day MA of 16.45, indicating a neutral trend. The MACD of 0.22 indicates Positive momentum. The RSI at 44.74 is Neutral, neither overbought nor oversold. The STOCH value of 29.26 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative 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 (62)
Financial Indicators
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
64 Neutral | $305.70M | ― | -89.29% | ― | 2.40% | 54.99% | |
62 Neutral | $390.49M | ― | 24.92% | ― | ― | ― | |
62 Neutral | $11.80B | 10.08 | -7.46% | 2.99% | 7.37% | -8.21% | |
61 Neutral | $409.54M | ― | -0.32% | ― | 18.51% | 97.57% | |
61 Neutral | $308.16M | 6.07 | 39.27% | ― | -1.90% | 0.05% | |
55 Neutral | $423.06M | 5.01 | -94.58% | ― | -2.75% | -4.13% | |
48 Neutral | $301.48M | ― | 81.52% | ― | -6.14% | 67.53% |
* Technology Sector Average
Performance Comparison
BAND
Bandwidth
13.76
-1.82
-11.68%
IMXI
International Money Express
10.28
-10.43
-50.36%
RXT
Rackspace Technology
1.27
-1.20
-48.58%
KLTR
Kaltura
1.99
0.69
53.08%
CCSI
Consensus Cloud Solutions
21.65
4.29
24.71%
GRRR
Gorilla Technology Group Inc.
19.31
16.08
497.83%
Bandwidth Corporate Events
Executive/Board ChangesShareholder MeetingsBusiness Operations and Strategy
Bandwidth Holds Annual Meeting, Votes on Key Proposals
Neutral
May 30, 2025
On May 29, 2025, Bandwidth Inc. held its Annual Meeting of Stockholders, where four proposals were voted on. The stockholders elected Class II directors, approved the Third Amended and Restated 2017 Incentive Award Plan, ratified Ernst & Young LLP as the independent registered public accounting firm for 2025, and approved the compensation of the company’s named executive officers. These decisions reflect the company’s strategic direction and governance priorities, potentially impacting its operational and financial strategies.
The most recent analyst rating on (BAND) stock is a Hold with a $19.00 price target. To see the full list of analyst forecasts on Bandwidth stock, see the BAND Stock Forecast page.
Glossary
BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
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.