Bandwidth, Inc. BAND reported impressive second-quarter 2024 results, with both the bottom and top lines beating the Zacks Consensus Estimate. The strong performance was backed by enterprises increasingly relying on Bandwidth’s platform for communications in the cloud. In order to drive growth, the company plans to focus on winning large enterprises and becoming the best global CPaaS (Communications Platform as a Service) platform for scaling digital engagement. Focus on strengthening profitability and expanding cash flow generation are positive factors.
Quarter Details
On a GAAP basis, net loss during the quarter was $5 million or a loss of 17 cents per share compared to a loss of $3.89 million or 15 cents per share in the prior-year quarter. The wider loss, despite top-line growth, was primarily attributable to higher costs of revenues and operating expenses.
Excluding non-recurring items, non-GAAP net income during the reported quarter was $9 million or 29 cents per share compared with $4.71 million or 16 cents per share in the prior-year quarter. The bottom line beat the Zacks Consensus Estimate by a penny.
Bandwidth Inc. Price, Consensus and EPS Surprise
Bandwidth Inc. price-consensus-eps-surprise-chart | Bandwidth Inc. Quote
Quarterly revenues improved to $173.6 million from $145.9 million in the prior-year quarter. The growth was backed by high demand for digital engagement and strong contributions from messaging services across a variety of use cases, including health care, retail and e-commerce shopping, fintech and civic engagement. The top line exceeded the consensus estimate of $173 million.
Revenues from cloud communication were $128.4 million, up 8% year over year. However, the figure missed our estimate of $144.3 million.
Operating Details
Non-GAAP gross margin during the quarter was 56%, up from 55% a year ago. Favorable product mix and operational efficiency propelled the gross margin. Adjusted EBITDA was $18.7 million, well above the guidance and up from $10.6 million in the prior-year period.
Cash Flow & Liquidity
In the first six months of 2024 the company generated $26.9 million cash from operations against a cash utilization of $3.3 million in the prior year period. Cash and cash equivalents as of Jun 30, 2024, were $62 million, with convertible senior notes of $280.66 million.
Guidance
For 2024, Bandwidth expects revenues in the band of $710 million to $720 million, with adjusted EBITDA in the range of $72 million to $76 million.
For the third quarter, revenues are expected to be between $180 million and $184 million. Adjusted EBITDA is anticipated in the band of $18 million to $20 million.
Zacks Rank & Stocks to Consider
Bandwidth currently carries a Zacks Rank #4 (Sell).
Telephone and Data Systems, Inc. TDS sports a Zacks Rank #1 (Strong Buy) at present. In the last reported quarter, it delivered an earnings surprise of 145.45%. You can see the complete list of today’s Zacks #1 Rank stocks here.
TDS is a diversified telecom service provider offering wireless and wireline services in the United States. It is witnessing strong revenue growth in the TDS Telecom segment, backed by significant fiber broadband investment made in the past couple of years. The company is actively increasing the portion of fiber networks across its service address mix to deliver high-speed Internet without any signal disruption.
Motorola Solutions Inc. MSI provides services and solutions to government segments and public safety programs, along with large enterprises and wireless infrastructure services. Motorola carries a Zacks Rank #2 (Buy) at present.
It delivered a trailing four-quarter average earnings surprise of 7.54% and has a long-term growth expectation of 9.47%. In the last reported quarter, Motorola delivered an earnings surprise of 11.51%.
Corning Incorporated GLW, carrying a Zacks Rank #2 at present, delivered a trailing four-quarter earnings surprise of 2.17% in the last reported quarter.
Corning’s focus on innovation is driving demand across its segments and giving it pricing power. It is benefiting from solid traction in its premium smartphone cover materials and semiconductor-related products and price hikes are contributing to growth in the display business.
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Bandwidth Inc. (BAND) : Free Stock Analysis Report
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