RALEIGH, N.C., April 15, 2025 /PRNewswire/ -- Bandwidth Inc. (NASDAQ: BAND), a leading global enterprise cloud communications company, today announced it will report its financial results for the first quarter ended March 31, 2025 before market open on Wednesday, May 7, 2025. Bandwidth will offer a live webcast of the conference call on the Investor Relations section of the company's website at https://investors.bandwidth.com, where a replay will also be available shortly following the completion of the eve ...

Core Insights - Bandwidth Inc. is showcasing AI-ready, software-driven cloud communications at the Enterprise Connect Conference & Expo, emphasizing the empowerment of enterprise IT leaders to simplify complexity and enhance customer and employee experiences [1][2]. Company Overview - Bandwidth is a global cloud communications software company that provides solutions for voice calling, text messaging, and emergency services, covering over 65 countries and more than 90% of global GDP [8]. - The company is recognized as a leader in unified communications and cloud contact centers, partnering with major players like Amazon Web Services, Cisco, Google, Microsoft, and others [8]. Innovations and Solutions - Bandwidth Maestro™ is highlighted as an AI-ready enterprise communications platform, known for its extensive bring-your-own-carrier (BYOC) integrations, providing IT leaders with flexibility in building their communications tech stack [5]. - AIBridge is introduced as a voice AI enabler that facilitates the integration of AI-driven customer experiences, accelerating voice AI adoption for enterprises [5]. - The Universal Platform enhances customer experience through faster onboarding, automated workflow management, and compliance assistance, all managed via software APIs [5]. - Visual Builder via Maestro allows enterprises to create and deploy complex call routing with a no-code approach [5]. - Voice Authentication and Call Verification tools utilize AI and machine learning for automated fraud detection, ensuring secure customer interactions [5]. - Bandwidth Voice & Messaging Insights & Alerts provide real-time performance analytics to optimize call quality and message deliverability [5]. Conference Participation - Bandwidth executives are participating in multiple panels and sessions at the Enterprise Connect conference, addressing key industry challenges and opportunities [4]. - Specific sessions include discussions on UC/contact center strategies, spam call labeling, and modernizing enterprise communications [4][6]. Engagement Opportunities - Attendees at the Enterprise Connect can visit Bandwidth's booth 1411 for live demonstrations and to meet with experts [2][7].

Core Viewpoint - Bandwidth (BAND) shares have recently declined by 9.4% over the past week, but the formation of a hammer chart pattern suggests potential support and a possible trend reversal in the future [1][2]. Technical Analysis - The hammer chart pattern indicates a potential bottoming out, with reduced selling pressure, which could lead to a bullish trend for the stock [2][4]. - A hammer pattern forms when there is a small difference between opening and closing prices, with a long lower wick, suggesting that buying interest has emerged after a downtrend [3][4]. - This pattern is significant when it appears at the end of a downtrend, indicating that bears may have lost control and that bulls are gaining strength [4]. Fundamental Analysis - There has been a positive trend in earnings estimate revisions for Bandwidth, which is a bullish indicator suggesting potential price appreciation [6]. - The consensus EPS estimate for the current year has increased by 4.8% over the last 30 days, indicating strong agreement among analysts regarding the company's improved earnings potential [7]. - Bandwidth currently holds a Zacks Rank of 2 (Buy), placing it in the top 20% of over 4,000 ranked stocks, which typically outperform the market [8].

Core Insights - Bandwidth Inc. has released its 2025 State of Messaging Report, highlighting key trends in business messaging for enterprises globally [1][3][7] - The report emphasizes the need for enterprises to adapt their messaging strategies to meet rising consumer expectations and evolving industry requirements [2][4] Key Findings - RCS (Rich Communication Services) is set to drive the next evolution of business messaging, especially with its adoption on Apple devices, leading to a more interactive and secure messaging experience [4] - Verified sending is crucial for building consumer trust, as consumers are increasingly wary of SMS links due to phishing and fraud concerns [4][5] - Messaging rules and requirements are increasing operational costs for businesses, necessitating a best practices framework for compliance and long-term success [4][5] - Deliverability is the top factor for businesses when selecting a messaging provider, with 60% prioritizing it over cost, features, and capacity [5] - 66% of businesses plan to increase their messaging usage once RCS is widely available, with 41% intending to use RCS for marketing and 25% for customer support [5] - Branded messaging and verified sender status are becoming essential for enterprises to enhance trust and engagement [5] - Non-compliance with registration requirements can lead to lower deliverability and increased costs, with 25% of businesses reporting higher expenses due to recent messaging rule changes [5] Innovations and Tools - Bandwidth has introduced new tools to improve message success rates, including Advanced Number Intelligence, Real-time Traffic Monitoring, and a Message Registration Center to assist businesses in compliance [6]

Group 1 - The article emphasizes the importance of portfolio rotation towards "growth at a reasonable price" stocks, especially as the S&P 500 reaches new record highs, indicating a cautious sentiment among investors [1] - The author, Gary Alexander, has extensive experience in covering technology companies and has been involved with seed-round startups, providing insights into current industry trends [1] - Alexander has been a contributor to Seeking Alpha since 2017 and his work is widely referenced in various trading platforms, highlighting his influence in the investment community [1]

Company Overview - Bandwidth operates as a Communications Platform-as-a-Service (CPaaS) provider, offering advanced software application programming interfaces for voice and messaging services [12] - It is the only API platform provider that owns a Tier 1 network with enhanced network capacity, primarily catering to business enterprises [12] - Bandwidth has 8,800 on-net rate centers, delivering high network quality and proactively monitoring operations 24/7 to resolve quality issues [12] Investment Potential - Bandwidth is rated 2 (Buy) on the Zacks Rank, with a VGM Score of A, indicating strong investment potential [13] - The company has a Growth Style Score of A, forecasting year-over-year earnings growth of 13.4% for the current fiscal year [13] - The Zacks Consensus Estimate for Bandwidth's earnings has increased by $0.01 to $1.52 per share, with one analyst revising their earnings estimate upwards in the last 60 days [13] - Bandwidth boasts an average earnings surprise of 14%, further enhancing its attractiveness to investors [13] Summary of Zacks Style Scores - The Zacks Style Scores are complementary indicators that rate stocks based on value, growth, and momentum characteristics [2][3] - Stocks are assigned ratings of A, B, C, D, or F, with higher scores indicating a better chance of outperforming the market [3] - The Value Score focuses on identifying undervalued stocks using various financial ratios [4] - The Growth Score assesses a company's future prospects based on earnings, sales, and cash flow [5] - The Momentum Score helps investors capitalize on upward or downward trends in stock prices [6] - The VGM Score combines all three styles, providing a comprehensive indicator for stock selection [6]

Core Viewpoint - Bandwidth Inc. reported mixed fourth-quarter 2024 results, with adjusted earnings missing estimates while revenues exceeded expectations [1][4]. Financial Performance - The company experienced a year-over-year revenue growth of 27%, reaching $210 million compared to $165.4 million in the prior-year quarter, driven by high demand for its universal Maestro platform and strong contributions from messaging services [6]. - For 2024, total revenues improved to $748.5 million from $601.1 million in 2023 [6]. - On a GAAP basis, the net loss for the fourth quarter was $1.76 million, or a loss of 6 cents per share, an improvement from a loss of $10.9 million, or 42 cents per share, in the prior-year quarter [3]. - Non-GAAP net income for the fourth quarter was $11.8 million, or 37 cents per share, compared to $11.1 million, or 38 cents per share, in the prior-year quarter [4]. - For the full year 2024, GAAP net loss was $6.52 million, or a loss of 24 cents per share, compared to a net loss of $16.3 million, or a loss of 64 cents per share, in 2023 [5]. - Non-GAAP net income for 2024 was $42 million, or $1.34 per share, compared to $24 million, or 83 cents per share, in 2023 [5]. Operational Metrics - Non-GAAP gross margin for the quarter was 58%, up from 55% a year ago, attributed to a favorable product mix and operational efficiency [7]. - Adjusted EBITDA for the quarter was $23.4 million, exceeding guidance and up from $18.8 million in the prior-year period [7]. Cash Flow and Liquidity - In 2024, net cash from operating activities was $84 million, compared to $39 million in the prior year [8]. - As of December 31, 2024, cash and cash equivalents were $81.8 million, with convertible senior notes totaling $281.3 million [8]. Guidance - For the first quarter of 2025, Bandwidth expects revenues in the range of $168-$170 million and adjusted EBITDA between $16 million and $18 million [9]. - For the full year 2025, the company anticipates revenues between $740 million and $760 million, with adjusted EBITDA forecasted to be in the range of $82 million to $90 million [10]. Strategic Focus - The company aims to focus on winning large enterprises and becoming the best global CPaaS platform for scaling digital engagement, while also strengthening profitability and expanding cash flow generation [2].

Growth and Market Challenges - The company has experienced significant growth since inception but cannot guarantee the same pace of growth in the future due to various uncontrollable factors [101]. - Economic conditions, including high inflation and interest rates, have impacted the company's financial health and may compress gross margins [105]. - The company is vulnerable to changes in market preferences and economic instability, which could lead to reduced customer demand and longer collection cycles [106]. - The competitive landscape is intensifying, with larger competitors having greater resources and the ability to bundle services at lower costs [110]. - Attracting new customers in a cost-effective manner is crucial for growth, and rising marketing costs could hinder this effort [115]. - The market for the company's services is relatively new and unproven, and its growth depends on customer adoption and recognition of the platform's benefits [116]. - The company faces challenges in expanding sales to enterprise customers, including lengthy sales cycles and the need for extensive customer education [120]. - If the company cannot increase revenue from enterprise customers, its financial condition may be adversely affected [119]. - The company emphasizes the importance of developing enhancements and new services to attract new customers and increase revenue from existing customers [122]. Operational Risks - The company relies on key vendors for materials and services, and any disruption could adversely affect operations and increase costs [107]. - The complexity of pricing and billing systems poses risks, as errors could adversely affect revenue and profitability [135]. - The company faces challenges in maintaining high-quality customer support, which is essential for customer retention and reputation [141]. - The company must manage inflationary pressures effectively to avoid negative impacts on operating results and cash flows [105]. - The company’s operations depend on the reliability of its systems; failures could disrupt service delivery and negatively impact customer confidence [201]. International Operations and Regulatory Risks - The company has experienced substantial international expansion, including the acquisition of Voxbone in late 2020, which is critical for future growth [132]. - International operations expose the company to legal, regulatory, economic, and political risks that could disrupt trade and service sales [143]. - The gross margin for international customers may be lower than for domestic customers, potentially affecting overall gross margin as operations expand [145]. - The company must comply with various international regulations, which may increase operational costs and limit service offerings in certain jurisdictions [176]. - Regulatory uncertainties in the communications industry may slow the company's growth and have a material adverse effect on its business and financial condition [164]. - Changes in regulations or delays in obtaining necessary regulatory approvals could adversely affect the company's operations and growth prospects [164]. - The company is subject to evolving data protection laws, which may increase compliance costs and operational complexities [178]. - Noncompliance with FCC regulations could lead to significant fines and operational disruptions, adversely affecting financial performance [170]. Financial and Taxation Risks - A significant portion of the company's revenue is concentrated among a limited number of customers, which poses a risk if any of the top ten customers significantly decrease orders [149]. - Tax liabilities related to sales, use, and telecommunications taxes may adversely affect the company's results of operations [223]. - The company may experience increased costs due to additional fees imposed by network providers, impacting gross margins [214]. - The company is exposed to potential audits by taxing authorities, which could result in significant financial impacts if found non-compliant [225]. - Future tax reforms could increase the estimated tax liability and affect the company's financial position and effective tax rates [228]. - The OECD's framework for a 15% global minimum tax may lead to changes in tax laws that could increase the company's tax liabilities [229]. Cybersecurity and Legal Risks - The company faces risks related to cyber-attacks, which could lead to service degradation, data loss, and significant additional costs to maintain network security [150][154]. - The company is currently subject to litigation regarding the billing and remittance of non-income-based taxes related to 911 services, which could adversely affect its results of operations [158]. - The company faces potential litigation and regulatory enforcement actions due to customer misuse of its services, which could damage its reputation and result in significant liabilities [159][160]. - The company has experienced increased scrutiny and correspondence from regulatory bodies like the FTC and FCC regarding its role in transmitting unauthorized calls [160]. - The company’s existing insurance policies may not fully cover liabilities arising from cyber incidents or security breaches, potentially impacting its financial condition [157]. Management and Structural Risks - The company has terminated its service offerings in Russia and Belarus due to significant sanctions and export controls imposed in response to the military conflict between Russia and Ukraine [147]. - The company’s ability to maintain its corporate culture during expansion is crucial for future success and operational efficiency [132]. - The loss of key management personnel could significantly delay the achievement of strategic objectives and adversely affect business performance [216]. - The dual class structure of the company's common stock concentrates voting control, limiting other stockholders' influence on corporate matters [269]. - The concentration of ownership by the CEO may lead to conflicts of interest that could adversely affect the trading price of Class A common stock [273]. Capital and Investment Risks - The company anticipates needing additional capital in the future, which may not be available on favorable terms, potentially affecting growth plans [283]. - The company has incurred substantial debt, which may increase risks related to its financial condition and ability to make payments on the Convertible Notes [253]. - The company may not have sufficient funds for cash settlement upon conversion of the Convertible Notes, potentially leading to defaults [254]. - The conditional conversion feature of the Convertible Notes could adversely affect the company's liquidity if triggered [255]. - The company has entered into capped call transactions to reduce potential dilution upon conversion of the Convertible Notes [256]. Market and Economic Conditions - Customer churn rates may increase due to economic changes, competition, and service quality issues, adversely affecting revenue growth [210]. - Market prices for certain services have decreased, impacting anticipated revenue and necessitating potential price reductions to remain competitive [211]. - The company is exposed to foreign currency exchange rate fluctuations, which could impact its financial condition and results of operations [239]. - The company does not currently hedge transactional exposures in foreign currencies, which may expose it to additional risks [241].

Core Insights - Bandwidth achieved record Q4 revenue of $210 million, a 27% increase year-over-year, surpassing analyst estimates of $203 million, but adjusted EPS of $0.37 fell short of the expected $0.39 [1][2][3] Financial Performance - Adjusted EPS was $0.37, down 2.6% from $0.38 in Q4 2023 [3] - Revenue reached $210 million, up from $165 million in Q4 2023, marking a 27% increase [3] - Adjusted gross margin improved to 58% from 55% year-over-year, indicating enhanced cost efficiency [3][7] - Adjusted EBITDA rose by 25% to $23.4 million compared to $18.8 million in the previous year [3][7] - Free cash flow significantly increased to $30.4 million from $13 million, reflecting a 133% growth [3] Business Overview - Bandwidth is a cloud communications service provider with a global all-IP network infrastructure, covering over 60 countries and 90% of global GDP [4] - The company focuses on an API-first approach and emphasizes innovation in AI-powered communications solutions [5][4] - Bandwidth serves major platforms like Microsoft, Google, and Zoom, enhancing its market position [4] Notable Achievements - Revenue growth in Q4 was driven by AI-powered solutions and strategic partnerships, including contracts with a Fortune 25 healthcare company and a global cruise line [6] - The company launched new products to improve scalability and integration capabilities of its universal platform [7] Concerns - Revenue from political messaging services amounted to $8 million, which is considered cyclical and may not be sustainable [8] - A decline in GAAP gross margin to 36% from 38% indicates rising costs that could affect future profitability [8] Forward Guidance - Management forecasts normalized revenue growth of 8% to 11% for 2025, anticipating a reduction in political campaign messaging revenue [9] - Targeted annual revenues are projected between $740 million to $760 million, with adjusted EBITDA expected to range from $82 million to $90 million [9] - The company aims to diversify revenue streams and sustain profitability through continued AI integration and cloud communication enhancements [10]

4Q24 and 2024 Earnings Results February 20, 2025 Legal disclaimer This presentation includes forward-looking statements. All statements contained in this presentation other than statements of historical facts, including, without limitation, future financial and business performance for the quarter ending March 31, 2025 and year ending December 31, 2025, the success of our product offerings and our platform, and the value proposition of our products, are forward-looking statements. The words "anticipate," "a ...