Bandwidth (BAND) Q1 Earnings Report Preview: What To Look For

Adam Hejl /
2022/05/03 7:04 am EDT

Communications platform as a service company Bandwidth (NASDAQ: BAND) will be reporting earnings tomorrow after market hours. Here's what to look for.

Last quarter Bandwidth reported revenues of $126.1 million, up 11.5% year on year, beating analyst revenue expectations by 6.72%. It was a weaker quarter for the company, with revenue guidance missing analysts' expectations for both the full year and the next quarter. The company added 55 customers to a total of 3,228.

Is Bandwidth buy or sell heading into the earnings? Read our full analysis here, it's free.

This quarter analysts are expecting Bandwidth's revenue to grow 10.8% year on year to $125.7 million, slowing down from the 65.6% year-over-year increase in revenue the company had recorded in the same quarter last year. Adjusted loss is expected to come in at -$0.08 per share.

Bandwidth Total Revenue

Majority of analysts covering the company have reconfirmed their estimates over the last thirty days, suggesting they are expecting the business to stay the course heading into the earnings. The company has a history of exceeding Wall St's expectations, beating revenue estimates every single time over the past two years on average by 8.41%.

Looking at Bandwidth's peers in the software development segment, only F5 Networks has so far reported results, with revenues decreasing 1.71% year on year, and in-line with analyst estimates. The stock was down 1.4% on the results. Read our full analysis of F5 Networks's earnings results here.

Triggered by the Federal Reserve's hawkish stance on interest rates, shares of technology companies have been facing a sell-off in 2022 and software stocks have not been spared, with share price down on average 16.9% over the last month. Bandwidth is down 31.5% during the same time, and is heading into the earnings with analyst price target of $65.1, compared to share price of $23.62.

One way to find opportunities in the market is to watch for generational shifts in the economy. Almost every company is slowly finding itself becoming a technology company and facing cybersecurity risks and as a result, the demand for cloud-native cybersecurity is skyrocketing. This company is leading a massive technological shift in the industry and with revenue growth of 70% year on year and best-in-class SaaS metrics it should definitely be on your radar.

The author has no position in any of the stocks mentioned.