Bandwidth (NASDAQ:BAND) Announces Earnings Results, Meets Expectations

by · The Markets Daily

Bandwidth (NASDAQ:BAND – Get Free Report) released its quarterly earnings data on Thursday. The company reported $0.35 earnings per share (EPS) for the quarter, meeting the consensus estimate of $0.35, FiscalAI reports. Bandwidth had a negative net margin of 1.54% and a positive return on equity of 1.17%. The company had revenue of $207.67 million during the quarter, compared to the consensus estimate of $208.30 million.

Here are the key takeaways from Bandwidth’s conference call:

  • Bandwidth issued upbeat 2026 guidance, targeting ~16% total revenue growth (≈10% cloud communications growth) and a near-20% adjusted EBITDA margin with non-GAAP EPS of $1.66–$1.74, signaling meaningful margin expansion.
  • The company highlighted strong AI-driven enterprise momentum, closing a record number of $1M+ deals in 2025 (examples: a major U.S. insurance group and a top-10 bank) and reporting a >4x increase in third-party conversational AI developers building on its platform.
  • Full-year 2025 results showed durable profitability and cash generation — $754M revenue (organic +10%), non-GAAP gross margin ~58%, adjusted EBITDA $93M, and $57M free cash flow — and Bandwidth announced an inaugural $80M share repurchase program while continuing to invest in R&D for AI.
  • Management emphasized a structural competitive advantage from owning a scaled global communications infrastructure, citing an 82% incremental gross profit yield, >99% customer name retention, and 107% organic net retention as defenses against rivals.
  • Management warned that market dynamics in messaging make it likely Bandwidth will fall short of its original multi-year 15%–20% revenue CAGR target, introducing revenue-growth risk despite margin and cash-flow progress.

Bandwidth Stock Performance

Shares of BAND stock traded up $2.85 during trading hours on Thursday, reaching $15.84. 728,585 shares of the company’s stock were exchanged, compared to its average volume of 284,343. The company has a debt-to-equity ratio of 0.63, a current ratio of 1.39 and a quick ratio of 1.39. The company’s 50 day moving average is $14.15 and its two-hundred day moving average is $14.89. The company has a market cap of $483.44 million, a P/E ratio of -40.61 and a beta of 2.15. Bandwidth has a 1 year low of $11.33 and a 1 year high of $18.63.

Key Headlines Impacting Bandwidth

Here are the key news stories impacting Bandwidth this week:

  • Positive Sentiment: Management delivered record fourth-quarter adjusted EBITDA and free cash flow, signaling improving profitability and cash conversion that support valuation upside. PR Newswire: Q4 and FY2025 Results
  • Positive Sentiment: The board authorized an $80 million share repurchase program, which reduces float and is typically viewed as shareholder-friendly — likely a direct contributor to the stock rally. PR Newswire: Buyback Announcement
  • Neutral Sentiment: Reported Q4 EPS of $0.35 matched consensus, removing an earnings miss risk, while revenue of $207.67M was essentially flat versus estimates (slightly below consensus). That keeps the quarter neutral-to-mixed in investors’ minds. Zacks: Matches Q4 Estimates
  • Neutral Sentiment: Analysts and coverage pieces are parsing key Q4 metrics and year-over-year trends to judge sustainability of margin improvement; detailed metric comparisons and management commentary will drive follow‑on analyst revisions. Zacks: How Key Metrics Compare
  • Negative Sentiment: Q1 2026 revenue guidance of $200M–$203M came in below Street expectations (~$207.9M), and Q4 revenue slightly missed consensus — short-term topline softness is a downside risk to near-term multiple expansion. Company Press Release / Slide Deck
  • Negative Sentiment: Reported EPS of $0.35 is below last year’s $0.37, indicating modest year-over-year earnings pressure despite margin improvement — a factor that could temper enthusiasm if growth slows. MarketBeat: Earnings & Call

Analyst Upgrades and Downgrades

BAND has been the topic of a number of research reports. Weiss Ratings restated a “sell (d-)” rating on shares of Bandwidth in a research report on Wednesday, January 21st. Wall Street Zen lowered shares of Bandwidth from a “buy” rating to a “hold” rating in a research note on Sunday, December 14th. B. Riley Financial began coverage on shares of Bandwidth in a report on Friday, January 23rd. They issued a “buy” rating and a $20.00 target price for the company. Finally, Robert W. Baird set a $16.00 price target on Bandwidth in a report on Friday, October 31st. Six investment analysts have rated the stock with a Buy rating, one has issued a Hold rating and two have assigned a Sell rating to the stock. Based on data from MarketBeat, the stock has an average rating of “Hold” and a consensus target price of $20.83.

View Our Latest Stock Report on Bandwidth

Insider Activity

In other Bandwidth news, insider Rebecca Bottorff sold 5,973 shares of the stock in a transaction on Monday, December 1st. The stock was sold at an average price of $14.06, for a total value of $83,980.38. Following the completion of the transaction, the insider owned 53,352 shares in the company, valued at approximately $750,129.12. This represents a 10.07% decrease in their ownership of the stock. The transaction was disclosed in a legal filing with the SEC, which can be accessed through this link. Also, COO Devesh Agarwal sold 4,202 shares of the firm’s stock in a transaction that occurred on Monday, December 1st. The shares were sold at an average price of $14.06, for a total value of $59,080.12. Following the completion of the transaction, the chief operating officer directly owned 77,482 shares of the company’s stock, valued at $1,089,396.92. The trade was a 5.14% decrease in their ownership of the stock. The disclosure for this sale is available in the SEC filing. Insiders have sold a total of 63,463 shares of company stock valued at $895,210 over the last three months. 6.50% of the stock is currently owned by corporate insiders.

Hedge Funds Weigh In On Bandwidth

Hedge funds have recently added to or reduced their stakes in the business. Tower Research Capital LLC TRC grew its position in shares of Bandwidth by 183.7% in the second quarter. Tower Research Capital LLC TRC now owns 3,776 shares of the company’s stock valued at $60,000 after purchasing an additional 2,445 shares during the last quarter. Raymond James Financial Inc. purchased a new stake in Bandwidth in the 2nd quarter valued at approximately $85,000. Quantbot Technologies LP purchased a new stake in Bandwidth in the 2nd quarter valued at approximately $128,000. State of Wyoming grew its holdings in Bandwidth by 104.6% during the 4th quarter. State of Wyoming now owns 8,756 shares of the company’s stock valued at $135,000 after buying an additional 4,476 shares during the last quarter. Finally, Brevan Howard Capital Management LP purchased a new position in Bandwidth during the third quarter worth $174,000. 68.53% of the stock is currently owned by hedge funds and other institutional investors.

Bandwidth Company Profile

(Get Free Report)

Bandwidth Inc operates a cloud-based communications platform that provides voice, messaging and emergency services APIs for enterprises and developers. Through its proprietary network and software-as-a-service model, the company enables customers to integrate programmable voice calls, text messaging and 9-1-1 routing into their applications. Bandwidth’s solutions aim to reduce complexity and improve reliability in mission-critical communications, serving industries such as healthcare, financial services, on-demand mobility and customer engagement.

Founded in 1999 in Raleigh, North Carolina by co-founders David Morken and Henry Kaestner, Bandwidth initially focused on voice-over-IP infrastructure before evolving into a full communications API provider.

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