Bandwidth Q4 Earnings: What To Expect

Radek Strnad /
2022/02/22 6:27 am EST
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Communications platform as a service company Bandwidth (NASDAQ: BAND) will be reporting results tomorrow after the bell. Here's what you need to know.

Last quarter Bandwidth reported revenues of $130.6 million, up 54.1% year on year, beating analyst revenue expectations by 3.61%. It was a slower quarter for the company, with an underwhelming revenue guidance for the next quarter and a decline in net revenue retention rate. The company added 122 customers to a total of 3,173.

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 4.54% year on year to $118.1 million, a significant deceleration from the 82.3% year-over-year increase in revenue the company had recorded in the same quarter last year. Adjusted loss is expected to come in at -$0.13 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 8.26%.

Looking at Bandwidth's peers in the software development segment, some of them have already reported Q4 earnings results, giving us a hint what we can expect. Twilio (NYSE:TWLO) delivered top-line growth of 53.7% year on year, beating analyst estimates by 9.53% and JFrog (NASDAQ:FROG) reported revenues up 38.7% year on year, exceeding estimates by 2.06%. Twilio's stock had a volatile reaction to the earnings, ending up 1.75% on the results, JFrog was down 6.97%. Read our full analysis of Twilio's results here and JFrog's results here.

Tech stocks have had a rocky start in 2022 and while some of the software stocks have fared somewhat better, they have not been spared, with share price declining 5.78% over the last month. Bandwidth is down 15.8% during the same time, and is heading into the earnings with analyst price target of $127.2, compared to share price of $51.3.

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.