Communications platform as a service company Bandwidth (NASDAQ: BAND) will be reporting earnings tomorrow before the bell. Here's what to look for.
Last quarter Bandwidth reported revenues of $148.3 million, up 13.5% year on year, beating analyst revenue expectations by 5.32%. It was a strong quarter for the company, with accelerating customer growth and a significant improvement in gross margin. The company added 18 customers to a total of 3,380.
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 16.5% year on year to $147 million, improving on the 11.6% year-over-year increase in revenue the company had recorded in the same quarter last year. Adjusted earnings are expected to come in at $0.04 per share.
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 6.01%.
Looking at Bandwidth's peers in the software development segment, some of them have already reported Q4 earnings results, giving us a hint of what we can expect. Twilio delivered top-line growth of 21.6% year on year, beating analyst estimates by 2.43% and Datadog reported revenues up 43.9% year on year, exceeding estimates by 4.44%. Twilio traded up 7.48% on the results, Datadog was down 6.14%. Read our full analysis of Twilio's results here and Datadog's results here.
There has been positive sentiment among investors in the software segment, with the stocks up on average 5.79% over the last month. Bandwidth is down 1.18% during the same time, and is heading into the earnings with analyst price target of $29.1, compared to share price of $23.43.
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The author has no position in any of the stocks mentioned.