Earnings To Watch: Bandwidth (BAND) Reports Q2 Results Tomorrow

Jabin Bastian /
2022/08/02 4:15 am EDT

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

Last quarter Bandwidth reported revenues of $131.3 million, up 15.7% year on year, beating analyst revenue expectations by 4.43%. It was a strong quarter for the company, with accelerating customer growth and a significant improvement in net revenue retention rate. The company added 144 customers to a total of 3,372.

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 10.6% year on year to $133.6 million, slowing down from the 57.1% year-over-year increase in revenue the company had recorded in the same quarter last year. Adjusted loss is expected to come in at -$0.07 per share.

Bandwidth Total Revenue

The analysts covering the company have been growing increasingly bearish about the business heading into the earnings, with revenue estimates seeing two downward revisions over the last thirty days. 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 7.93%.

Looking at Bandwidth's peers in the software development segment, only F5 Networks has so far reported results, delivering top-line growth of 3.52% year on year, and beating analyst estimates by 0.99%. The stock traded up 10.8% on the results. Read our full analysis of F5 Networks's earnings results here.

Tech stocks have been facing declining investor sentiment in 2022 and while some of the software stocks have fared somewhat better, they have not been spared, with share price declining 3.08% over the last month. Bandwidth is down 19.4% during the same time, and is heading into the earnings with analyst price target of $44, compared to share price of $16.76.

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.