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Bandwidth (BAND)
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Bandwidth (BAND) AI Stock Analysis

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BAND

Bandwidth

(NASDAQ:BAND)

Rating:62Neutral
Price Target:
$15.50
▲(0.91% Upside)
Bandwidth's strong earnings call and revenue growth are significant positives, but challenges in profitability and valuation weigh down the overall score. The technical indicators suggest a neutral market sentiment.
Positive Factors
Financial Performance
Bandwidth reported solid Q2 results, with modest upside to revenue and adjusted EBITDA, driven by voice strength, aided by growing AI traction.
Growth Potential
The combination of ramping FCF/EBITDA margins with a secular tailwind for voice applications in customer service will support ongoing growth in Enterprise Voice, which is margin accretive to the company.
Market Position
Bandwidth is expected to continue winning market share from legacy telcos due to their differentiated solution including Maestro operating system, and global voice network.
Negative Factors
Guidance Concerns
The reiterated full-year revenue guide, along with third-quarter revenue guidance modestly below consensus, is the primary reason shares are off 15%-plus.
Messaging Business
The company now expects messaging will grow high-single digits, which is lower than previously expected low-double digits.
Revenue Guidance
Shares are down post the Q2 call due to the revenue guidance unchanged, and implying a greater Q/Q acceleration than previously expected from Q3 to Q4 to meet or exceed the 2025 revenue guidance.

Bandwidth (BAND) vs. SPDR S&P 500 ETF (SPY)

Bandwidth Business Overview & Revenue Model

Company DescriptionBandwidth Inc. operates as a cloud-based software-powered communications platform-as-a-service (CPaaS) provider in the United States. The company operates in two segments, CPaaS and Other. Its platform enables enterprises to create, scale, and operate voice or messaging communications services across various mobile applications or connected devices. The company also provides SIP trunking, data resale, and hosted voice over Internet protocol services. It serves large enterprises, communications service providers, conferencing providers, contact centers, small and medium-sized businesses, emerging technology companies, and many other businesses. Bandwidth Inc. was founded in 2000 and is headquartered in Raleigh, North Carolina.
How the Company Makes MoneyBandwidth generates revenue primarily through its usage-based pricing model, which means that customers are billed based on the volume of services they consume, such as the number of calls made or messages sent. Key revenue streams include charges for voice minutes, SMS messages, and access to premium features like 911 services. Additionally, Bandwidth partners with major technology companies and platforms, enhancing its market presence and driving growth through strategic integrations. The company also benefits from long-term contracts with enterprise customers, providing a steady revenue base and fostering customer loyalty.

Bandwidth Earnings Call Summary

Earnings Call Date:Jul 29, 2025
(Q2-2025)
|
% Change Since: |
Next Earnings Date:Oct 30, 2025
Earnings Call Sentiment Positive
The earnings call highlighted significant achievements in terms of financial performance and strategic execution, particularly with AI-driven initiatives and strong customer acquisition. Despite some slower growth in messaging, the overall sentiment is positive due to the impressive growth metrics and future outlook.
Q2-2025 Updates
Positive Updates
Exceeding Financial Expectations
Revenue of $180 million and adjusted EBITDA of $22 million exceeded expectations for the quarter. Revenue grew 15%, EBITDA 36%, and free cash flow 26% over the last 12 months.
AI Strategy Success
Significant traction in AI voice investments with new $1 million-plus multiyear deals. Maestro and AI Bridge platforms are driving customer adoption, particularly in financial services, healthcare, and hospitality.
Customer Wins and Expansion
Secured high-value customers, including a large US bank and a leading insurance brokerage, highlighting the strength of integrated direct and channel sales strategies.
Strong Growth in Enterprise Voice Revenue
Enterprise voice revenue grew 29% year-over-year, driven by demand on the core platform and cloud migrations.
Record High Metrics
Record high first half non-GAAP gross margins, EBITDA, and operating cash flows. Customer name retention remained well above 99%.
Negative Updates
Messaging Revenue Growth
Messaging revenue growth was at 7% for commercial messaging, in line with market growth but indicates limited expansion in this area.
Company Guidance
During Bandwidth Inc.'s Second Quarter 2025 Earnings Call, the company provided optimistic financial guidance and highlighted several key metrics demonstrating strong performance. Revenue for the quarter reached $180 million, marking a 9% year-over-year increase when normalized for cyclical political campaign revenue. Adjusted EBITDA was $22 million, growing by 17% year-over-year, while free cash flow was $26 million, representing a 19% margin. The company projected 10% organic revenue growth at the midpoint for the full year, with EBITDA expected to reach $88 million. Bandwidth also emphasized the significant impact of its AI strategy, with AI-driven services potentially generating 3x to 4x the revenue of a standard voice call. The company achieved a net retention rate of 112% and customer name retention remained above 99%, showcasing strong customer loyalty and engagement.

Bandwidth Financial Statement Overview

Summary
Bandwidth shows robust revenue growth and effective cash flow management, yet struggles with profitability and high leverage. The company needs to improve cost efficiencies to enhance margins and profitability.
Income Statement
65
Positive
Bandwidth's revenue has shown consistent growth over the years, with a TTM revenue of $758 million, representing a growth rate from the previous year. However, the company has struggled with profitability, consistently showing negative net income and EBIT margins. The gross profit margin remains healthy, but net profit and EBIT margins are negative, indicating challenges in managing operating expenses.
Balance Sheet
60
Neutral
The company maintains a balanced equity ratio with stockholders' equity at 37.6% of total assets, showing a moderate level of financial stability. However, the debt-to-equity ratio is high at 1.25, suggesting significant leverage. Return on equity is negative, reflecting ongoing net losses which could be a concern for investors.
Cash Flow
70
Positive
Bandwidth exhibits strong operating cash flow to net income ratio and has seen improvements in free cash flow, suggesting effective cash management. The free cash flow has grown positively in the TTM period, supporting operational needs despite ongoing net losses.
BreakdownTTMDec 2024Dec 2023Dec 2022Dec 2021Dec 2020
Income Statement
Total Revenue758.11M748.49M601.12M573.15M490.91M343.11M
Gross Profit292.82M279.96M236.16M238.35M218.52M157.86M
EBITDA37.99M42.15M32.55M62.93M34.23M8.11M
Net Income-10.02M-6.52M-16.34M19.57M-27.36M-43.98M
Balance Sheet
Total Assets1.02B989.17M1.10B929.32M1.07B890.61M
Cash, Cash Equivalents and Short-Term Investments68.14M83.79M153.47M184.87M331.45M112.16M
Total Debt480.13M503.59M644.54M492.64M503.20M304.91M
Total Liabilities637.94M676.63M803.66M657.14M652.94M460.69M
Stockholders Equity384.54M312.53M297.39M272.18M412.60M429.92M
Cash Flow
Free Cash Flow62.29M69.90M19.10M-29.18M-13.83M-10.07M
Operating Cash Flow85.62M83.88M39.00M34.91M40.80M4.52M
Investing Cash Flow-18.21M-1.44M30.85M-133.45M2.83M-455.08M
Financing Cash Flow-69.32M-131.27M-52.77M-120.00M207.03M346.89M

Bandwidth Technical Analysis

Technical Analysis Sentiment
Positive
Last Price15.36
Price Trends
50DMA
14.87
Positive
100DMA
14.24
Positive
200DMA
15.61
Positive
Market Momentum
MACD
0.23
Negative
RSI
62.35
Neutral
STOCH
95.28
Negative
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For BAND, the sentiment is Positive. The current price of 15.36 is above the 20-day moving average (MA) of 14.41, above the 50-day MA of 14.87, and below the 200-day MA of 15.61, indicating a bullish trend. The MACD of 0.23 indicates Negative momentum. The RSI at 62.35 is Neutral, neither overbought nor oversold. The STOCH value of 95.28 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for BAND.

Bandwidth Risk Analysis

Bandwidth disclosed 71 risk factors in its most recent earnings report. Bandwidth reported the most risks in the "Finance & Corporate" category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 0 New Risks

Bandwidth Peers Comparison

Overall Rating
UnderperformOutperform
Sector (61)
Financial Indicators
Name
Overall Rating
Market Cap
P/E Ratio
ROE
Dividend Yield
Revenue Growth
EPS Growth
69
Neutral
$431.01M8.9636.15%-4.19%-3.52%
65
Neutral
$504.22M6.38-94.58%-1.23%-11.22%
62
Neutral
$459.65M-2.90%14.51%58.41%
61
Neutral
$35.09B8.26-10.58%1.90%8.56%-9.51%
56
Neutral
$231.74M-94.40%2.56%59.00%
53
Neutral
$375.17M24.92%
48
Neutral
$339.89M81.52%-4.76%56.32%
* Technology Sector Average
Performance Comparison
Ticker
Company Name
Price
Change
% Change
BAND
Bandwidth
15.36
-0.55
-3.46%
IMXI
International Money Express
14.68
-3.37
-18.67%
RXT
Rackspace Technology
1.30
-0.81
-38.39%
KLTR
Kaltura
1.49
0.40
36.70%
CCSI
Consensus Cloud Solutions
26.39
3.69
16.26%
GRRR
Gorilla Technology Group Inc.
16.89
13.78
443.09%

Bandwidth Corporate Events

Executive/Board ChangesShareholder MeetingsBusiness Operations and Strategy
Bandwidth Holds Annual Meeting, Votes on Key Proposals
Neutral
May 30, 2025

On May 29, 2025, Bandwidth Inc. held its Annual Meeting of Stockholders, where four proposals were voted on. The stockholders elected Class II directors, approved the Third Amended and Restated 2017 Incentive Award Plan, ratified Ernst & Young LLP as the independent registered public accounting firm for 2025, and approved the compensation of the company’s named executive officers. These decisions reflect the company’s strategic direction and governance priorities, potentially impacting its operational and financial strategies.

Glossary
BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.

Disclaimer

This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.Date of analysis: Aug 28, 2025