Core Viewpoint - Bandwidth Inc. will report its financial results for Q4 and the full year ended December 31, 2025, on February 19, 2026, before market open [1]. Group 1: Financial Reporting - The financial results announcement will occur before market open on February 19, 2026 [1]. - A live webcast of the conference call will be available on the Investor Relations section of the company's website, with a replay accessible shortly after the event [2]. - The conference call is scheduled for 8:00 a.m. Eastern Time on February 19, 2026, with specific dial-in numbers provided for domestic and international participants [3]. Group 2: Company Overview - Bandwidth Inc. is a global cloud communications software company that provides voice calling, text messaging, and emergency services [4]. - The company's solutions cover over 65 countries and more than 90 percent of global GDP, serving major players in unified communications and cloud contact centers, including AWS, Cisco, Google, Microsoft, and others [4]. - Bandwidth is recognized as a pioneer in the cloud communications sector, being the first global Communications Platform-as-a-Service (CPaaS) to offer a unique combination of composable APIs, AI capabilities, and an owner-operated network [4].

Core Insights - The individual investor focuses on undercovered companies, particularly in technology, software, electronics, and energy transition sectors, with a watchlist of up to 100 companies [1] - The investor has over 7 years of personal capital investment experience globally and aims to identify asymmetric investment opportunities for market-beating returns [1] Investment Focus - The investor specializes in small to mid-cap companies that are less researched by others, indicating a niche market approach [1] - The investor holds a Master's degree in Electrical Engineering and works as an automotive battery R&D engineer, suggesting a strong technical background relevant to the sectors of interest [1] Research and Analysis - The write-ups on Seeking Alpha serve as a platform for the investor to articulate investment theses and engage with the investing community for feedback [1] - The emphasis on diligent study and research highlights a commitment to thorough analysis in identifying potential investment opportunities [1]

Core Insights - Business messaging is experiencing a significant transformation driven by RCS, AI, and consumer demands for trust and transparency [1][2] Group 1: RCS and AI Impact - The "RCS Gap" presents a substantial opportunity, with 96% RCS device coverage but 59% of businesses planning to deploy RCS without having launched yet [4] - By 2030, 80% of enterprise applications are expected to be multimodal, integrating voice, text, and visual content, with RCS and AI-driven messaging becoming preferred methods [5] Group 2: SMS and Customer Engagement - SMS remains a crucial component for cost-efficient, high-volume reach, with brands using a mix of short codes, toll-free, 10DLC, and RCS, enhanced by AI for a personalized customer experience [6] - Trust is becoming a key differentiator, as enterprises move towards branded, verified messaging to enhance engagement and rebuild consumer confidence, utilizing RCS features like sender verification [7] Group 3: Deliverability and Provider Selection - Message deliverability is the primary factor in choosing a messaging provider, surpassing cost or features, with Bandwidth offering advanced tools for campaign registration and delivery insights to meet this priority [8]

Industry Overview - The Zacks Communication - Infrastructure industry is benefiting from increased user demand for digital innovations, leading to fiber densification and extensive 5G deployment [1] - Industry players provide infrastructure solutions for communication networks, including high-speed network access solutions and various hardware and software products [3] Future Trends - The industry is transitioning to cloud services, driven by the growth of bandwidth-intensive applications and the deployment of 5G technology, requiring significant investments in LTE, broadband, and fiber [4] - Companies are focusing on improving customer service and achieving competitive cost structures to attract new customers and increase average revenue per user [4] Challenges - The industry faces high capital expenditures for infrastructure upgrades, unpredictable raw material prices, and supply chain disruptions, which pose significant threats [1] - A shortage of chips and high raw material prices due to inflation and geopolitical tensions are impacting profitability [5] Network Development - Operators are moving towards converged network structures that combine voice, video, and data communications, which is expected to reduce service delivery costs and expand coverage [6] Industry Performance - The Zacks Communication - Infrastructure industry has outperformed the broader Zacks Computer and Technology sector and the S&P 500, with a growth of 113.9% over the past year compared to 16.3% and 26.9% for the S&P 500 and sector, respectively [9] Valuation Metrics - The industry is currently trading at a trailing 12-month EV/EBITDA of 7.08X, significantly lower than the S&P 500's 18.74X and the sector's 19.84X [12] Key Companies - **CommScope**: A leading provider of infrastructure solutions, with a focus on cost-cutting and core operations, has seen a stock surge of 256.5% in the past year and a revised earnings estimate of $1.64 per share [15] - **IHS Holding**: Operates over 37,000 towers and has gained 128% in stock value over the past year, with a current earnings estimate of 78 cents per share [18][19] - **Bandwidth**: A CPaaS provider with a focus on software APIs, supports high user volumes and has a Zacks Rank of 3 (Hold) [22]

Core Insights - The Q3 earnings season is characterized by volatility, with stocks needing to demonstrate their value to support the significant rally observed in 2025 [1] Group 1: Market Overview - The overall stock market is perceived as expensive, but this view may overlook the fact that the valuation concerns are primarily concentrated in specific sectors [1] Group 2: Analyst Background - Gary Alexander has extensive experience in technology sectors, having worked on Wall Street and in Silicon Valley, and has been involved with seed-round startups [1]

Core Insights - Bandwidth Inc. (BAND) reported mixed results for Q3 2025, with revenues exceeding estimates but net loss missing expectations [1][4][10] Revenue Performance - Quarterly revenues decreased to $191.9 million from $193.9 million year-over-year, primarily due to lower revenues from political campaign messaging, although this was offset by strong demand for digital engagement and messaging services in sectors like healthcare and financial services [2][5] - The top line surpassed the Zacks Consensus Estimate of $189.8 million [5] Profitability Metrics - On a GAAP basis, the company reported a net loss of $1.24 million or 4 cents per share, compared to a net income of $0.41 million or 1 cent per share in the same quarter last year, attributed to declining sales and higher operating expenses [3][10] - Non-GAAP net income was $11.4 million or 36 cents per share, down from $12.8 million or 43 cents per share year-over-year, missing the Zacks Consensus Estimate of 38 cents [4][10] Operating Efficiency - Non-GAAP gross margin remained stable at 58%, supported by a favorable product mix [6] - Adjusted EBITDA was $24.3 million, exceeding guidance and slightly up from $24 million in the prior-year period [6] Cash Flow and Liquidity - Net cash from operating activities for the quarter was $50.9 million, an increase from $47.4 million in the previous year [7] - As of September 30, 2025, cash and cash equivalents stood at $73.4 million, with convertible senior notes totaling $247.3 million [7] Future Outlook - Bandwidth anticipates continued growth, projecting revenues for 2025 in the range of $747-760 million, reflecting a year-over-year growth of 9-11% [8] - Adjusted EBITDA is forecasted to be between $89-92 million, an increase from the previous estimate of $86-$91 million [8] - The company expects growing adoption of voice AI and strength in software revenues to drive overall revenue growth in Q4 [9]

Core Insights - Bandwidth reported revenue of $191.9 million for the quarter ended September 2025, a decrease of 1% year-over-year, with EPS at $0.36 compared to $0.43 in the same quarter last year [1] - The revenue exceeded the Zacks Consensus Estimate of $189.9 million by 1.05%, while the EPS fell short of the consensus estimate of $0.38 by 5.26% [1] Financial Performance Metrics - Net retention rate was reported at 105%, below the estimated 110.6% by analysts [4] - International revenue reached $26.15 million, surpassing the estimated $24.6 million, reflecting a year-over-year increase of 10.8% [4] - North American revenue was $165.74 million, slightly below the estimate of $165.77 million, indicating a year-over-year decline of 2.7% [4] - Revenue from messaging surcharges was $50.09 million, exceeding the average estimate of $47.04 million [4] - Revenue from cloud communications was reported at $141.81 million, below the estimated $143.27 million [4] Stock Performance - Bandwidth shares have returned +4.9% over the past month, outperforming the Zacks S&P 500 composite's +3.6% change [3] - The stock currently holds a Zacks Rank 4 (Sell), suggesting potential underperformance relative to the broader market in the near term [3]

Group 1 - The article does not provide any relevant content regarding company or industry insights [1]

Core Viewpoint - Bandwidth (BAND) reported quarterly earnings of $0.36 per share, missing the Zacks Consensus Estimate of $0.38 per share, and showing a decline from $0.43 per share a year ago, indicating a -5.26% earnings surprise [1] Financial Performance - Bandwidth posted revenues of $191.9 million for the quarter ended September 2025, surpassing the Zacks Consensus Estimate by 1.05%, but down from $193.88 million year-over-year [2] - Over the last four quarters, the company has exceeded consensus revenue estimates four times [2] Stock Performance - Bandwidth shares have declined approximately 1.5% since the beginning of the year, contrasting with the S&P 500's gain of 17.2% [3] Future Outlook - The company's earnings outlook is crucial for assessing future stock performance, with current consensus EPS estimates at $0.48 for the coming quarter and $1.59 for the current fiscal year [7] - The Zacks Rank for Bandwidth is currently 4 (Sell), indicating expected underperformance in the near future [6] Industry Context - The Communication - Infrastructure industry, to which Bandwidth belongs, is currently ranked in the bottom 23% of over 250 Zacks industries, suggesting potential challenges ahead [8]

Financial Data and Key Metrics Changes - Total revenue for Q3 2025 was $192 million, an 11% year-over-year increase, normalized for the previous year's political campaign revenue [17] - Cloud Communications Services revenue reached $142 million, reflecting an 8% year-over-year increase on a normalized basis [17] - Adjusted EBITDA was $24 million, exceeding expectations due to higher revenue and lower spending [18] - Non-GAAP gross margin remained strong at 58% [17][18] - Free cash flow generated in the quarter was $13 million, with a trailing 12-month free cash flow growth of 35% year-over-year [18][21] Business Line Data and Key Metrics Changes - Enterprise Voice revenue increased by 22% year-over-year, driven by strong adoption among existing customers and new customer ramping [19] - Programmable Messaging achieved a normalized growth of 6% year-over-year [20] - Average annual revenue per customer reached a record of $231,000, growing 46% over the last three years [21] Market Data and Key Metrics Changes - The net retention rate for Q3 was 105%, and 107% when excluding political campaign revenue [20] - The largest customer category grew revenue by 7% year-over-year, more than doubling the growth rate from the previous year [20] Company Strategy and Development Direction - The company is evolving its business model towards a higher mix of recurring software-driven revenue and adding intelligent automation and value-added services [5] - The focus is on being the provider of choice for conversational AI deployment, with a strategy that includes native AI within CCaaS platforms and public APIs [7][8] - The Trust Services portfolio was highlighted as a key lever for competitive advantage, addressing customer challenges related to call answer rates [11][12] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the continued momentum in voice AI and increasing software revenue, positioning the company for a solid fourth quarter and start to the new year [22] - The company anticipates continued growth in Global Voice Plans and Enterprise Voice customers, along with a robust political campaign messaging season [23] Other Important Information - The company won the Technology Disruptor award from Ally Financial, recognizing its role in transforming customer experience [5] - The introduction of new AI-driven products, such as the AI Receptionist and Bandwidth Activation Agent, aims to enhance customer experience and operational efficiency [9][10] Q&A Session Summary Question: Can you characterize overall demand and customer conversations? - Management noted a record number of $1 million plus revenue customers, reflecting broad-based demand and healthy growth in voice [30] Question: What are the 2026 medium-term targets? - The company aims for above-market revenue growth, 60% and greater gross margins, 20% and greater EBITDA margin, and 15% and greater free cash flow margin [32] Question: How are new products impacting Enterprise Voice and Global Voice Plans? - New products are initially launched for enterprise customers but are quickly adopted by Global Voice Plans customers due to overlapping interests [49] Question: What trends are seen with the Number Reputation Management product? - The product addresses consumer trust issues and is expected to have a global opportunity, driving customer wins [70]