Bandwidth (BAND) Tops Q4 Earnings Estimates on Solid Revenues

Core Viewpoint - Bandwidth Inc. (BAND) reported strong fourth-quarter 2023 results, surpassing both top-line and bottom-line estimates, driven by increased enterprise reliance on its cloud communications platform [1] Financial Performance - The company experienced a GAAP net loss of $10.9 million or 42 cents per share, compared to a loss of $4.9 million or 16 cents per share in the prior-year quarter, attributed to higher costs of revenues [2] - Non-GAAP net income for the quarter was $11.1 million or 38 cents per share, up from $5.8 million or 19 cents per share year-over-year, beating the Zacks Consensus Estimate by 14 cents [2] - For 2023, GAAP net loss was $16.3 million or 64 cents per share, compared to a loss of $14.9 million or 48 cents per share in 2022; non-GAAP net income was $24 million or 83 cents per share, up from $16.7 million or 54 cents per share in 2022 [2] Revenue Growth - Quarterly revenues increased to $165.4 million from $157 million in the prior-year quarter, exceeding the consensus estimate of $154 million, driven by high demand for digital engagement and strong messaging service contributions across various sectors [3] - For 2023, total revenues rose to $601.1 million from $573.2 million in 2022 [3] Operating Metrics - Non-GAAP gross margin for the quarter was 55%, down from 56% a year ago, primarily due to increased costs of revenues; however, the company achieved record profitability of 39% for the quarter [4] - Adjusted EBITDA was $18.8 million, significantly above guidance and up from $8.3 million in the prior-year period [4] Cash Flow and Liquidity - In 2023, net cash from operating activities was $39 million, compared to $34.9 million in the previous year; cash and cash equivalents as of December 31, 2023, were $132 million, with convertible senior notes totaling $418.5 million [5] Future Guidance - For 2024, Bandwidth expects revenues between $695 million and $705 million, with adjusted EBITDA projected in the range of $70 million to $74 million [6] - For the first quarter of 2024, revenues are anticipated to be between $164 million and $166 million, with adjusted EBITDA expected to be between $11 million and $13 million [6]