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Bandwidth (BAND) Down 6.3% Since Last Earnings Report: Can It Rebound?
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A month has gone by since the last earnings report for Bandwidth (BAND - Free Report) . Shares have lost about 6.3% in that time frame, underperforming the S&P 500.
Will the recent negative trend continue leading up to its next earnings release, or is Bandwidth due for a breakout? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at the most recent earnings report in order to get a better handle on the important catalysts.
Bandwidth Tops Q1 Earnings Estimates on Revenue Growth
Bandwidth reported impressive first-quarter 2021 results, wherein both the bottom and the top lines beat the respective Zacks Consensus Estimate.
Bottom Line
On a GAAP basis, net loss in the March quarter was $5.3 million or loss of 21 cents per share compared with a net loss of $1.1 million or loss of 4 cents per share in the prior-year quarter. The deterioration despite narrower operating loss was largely due to other expenses to the tune of $5.6 million.
Adjusted net income came in at $8.3 million or 30 cents per share compared with $1.1 million or 4 cents per share in the year-ago quarter. Also, the bottom line beat the Zacks Consensus Estimate by 29 cents, delivering a surprise of 2,900%.
Revenues
Quarterly total revenues were $113.5 million compared with $68.5 million in the prior-year quarter. The 65.7% growth was primarily driven by higher Communications Platform-as-a-Service (CPaaS) revenues. Also, the top line surpassed the consensus estimate of $108 million.
Segment-wise, CPaaS revenues increased 69.4% year over year to $100.1 million and accounted for 88.2% of total revenues. The rise was primarily driven by increased demand for work-from-home connectivity solutions.
Bandwidth had 2,959 active CPaaS customers as of Mar 31, 2021, up 63.7% year over year. This includes the contribution from Voxbone. The dollar-based net retention rate was 125% compared with 126% in the prior-year quarter. Adjusted CPaaS gross profit jumped to $51.7 million from $29.7 million with respective margins of 52% and 50%.
Other revenues increased to $13.3 million from $9.4 million in the year-ago quarter.
Other Details
Total operating expenses were $52.2 million compared with $35 million in the prior-year quarter. Operating loss was $37K compared with a loss of $2.9 million in the year-ago quarter.
Adjusted gross profit in the quarter improved to $57.4 million from $34.7 million with margin of 51% and 51%, respectively. Adjusted EBITDA totaled $13.4 million compared with $3.1 million in the year-ago quarter.
Cash Flow & Liquidity
During the first quarter of 2021, Bandwidth generated $10 million of net cash from operating activities against cash utilization of $7.6 million in the year-ago quarter.
As of Mar 31, 2021, this enterprise software developer had $319.7 million in cash and cash equivalents with $464.8 million of convertible senior notes. This compares with the respective tallies of $72.2 million and $282.2 million at the end of the previous quarter.
Q2 & 2021 Guidance
Bandwidth has provided guidance for the second quarter and full-year 2021. For the ongoing quarter, total revenues are expected in the range of $116-$117 million. CPaaS revenues are expected in the band of $101.2-$102.2 million. Adjusted earnings are anticipated to be 8-10 cents per share.
For 2021, total revenues are anticipated in the range of $473.1-$476.1 million. CPaaS revenues are projected in the band of $417.6-$420.6 million. Adjusted earnings are estimated in the range of 47-55 cents per share.
How Have Estimates Been Moving Since Then?
It turns out, fresh estimates have trended upward during the past month. The consensus estimate has shifted 68.29% due to these changes.
VGM Scores
At this time, Bandwidth has a nice Growth Score of B, however its Momentum Score is doing a bit better with an A. However, the stock was allocated a grade of D on the value side, putting it in the bottom 40% for this investment strategy.
Overall, the stock has an aggregate VGM Score of C. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Estimates have been trending upward for the stock, and the magnitude of these revisions looks promising. Notably, Bandwidth has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.
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Bandwidth (BAND) Down 6.3% Since Last Earnings Report: Can It Rebound?
A month has gone by since the last earnings report for Bandwidth (BAND - Free Report) . Shares have lost about 6.3% in that time frame, underperforming the S&P 500.
Will the recent negative trend continue leading up to its next earnings release, or is Bandwidth due for a breakout? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at the most recent earnings report in order to get a better handle on the important catalysts.
Bandwidth Tops Q1 Earnings Estimates on Revenue Growth
Bandwidth reported impressive first-quarter 2021 results, wherein both the bottom and the top lines beat the respective Zacks Consensus Estimate.
Bottom Line
On a GAAP basis, net loss in the March quarter was $5.3 million or loss of 21 cents per share compared with a net loss of $1.1 million or loss of 4 cents per share in the prior-year quarter. The deterioration despite narrower operating loss was largely due to other expenses to the tune of $5.6 million.
Adjusted net income came in at $8.3 million or 30 cents per share compared with $1.1 million or 4 cents per share in the year-ago quarter. Also, the bottom line beat the Zacks Consensus Estimate by 29 cents, delivering a surprise of 2,900%.
Revenues
Quarterly total revenues were $113.5 million compared with $68.5 million in the prior-year quarter. The 65.7% growth was primarily driven by higher Communications Platform-as-a-Service (CPaaS) revenues. Also, the top line surpassed the consensus estimate of $108 million.
Segment-wise, CPaaS revenues increased 69.4% year over year to $100.1 million and accounted for 88.2% of total revenues. The rise was primarily driven by increased demand for work-from-home connectivity solutions.
Bandwidth had 2,959 active CPaaS customers as of Mar 31, 2021, up 63.7% year over year. This includes the contribution from Voxbone. The dollar-based net retention rate was 125% compared with 126% in the prior-year quarter. Adjusted CPaaS gross profit jumped to $51.7 million from $29.7 million with respective margins of 52% and 50%.
Other revenues increased to $13.3 million from $9.4 million in the year-ago quarter.
Other Details
Total operating expenses were $52.2 million compared with $35 million in the prior-year quarter. Operating loss was $37K compared with a loss of $2.9 million in the year-ago quarter.
Adjusted gross profit in the quarter improved to $57.4 million from $34.7 million with margin of 51% and 51%, respectively. Adjusted EBITDA totaled $13.4 million compared with $3.1 million in the year-ago quarter.
Cash Flow & Liquidity
During the first quarter of 2021, Bandwidth generated $10 million of net cash from operating activities against cash utilization of $7.6 million in the year-ago quarter.
As of Mar 31, 2021, this enterprise software developer had $319.7 million in cash and cash equivalents with $464.8 million of convertible senior notes. This compares with the respective tallies of $72.2 million and $282.2 million at the end of the previous quarter.
Q2 & 2021 Guidance
Bandwidth has provided guidance for the second quarter and full-year 2021. For the ongoing quarter, total revenues are expected in the range of $116-$117 million. CPaaS revenues are expected in the band of $101.2-$102.2 million. Adjusted earnings are anticipated to be 8-10 cents per share.
For 2021, total revenues are anticipated in the range of $473.1-$476.1 million. CPaaS revenues are projected in the band of $417.6-$420.6 million. Adjusted earnings are estimated in the range of 47-55 cents per share.
How Have Estimates Been Moving Since Then?
It turns out, fresh estimates have trended upward during the past month. The consensus estimate has shifted 68.29% due to these changes.
VGM Scores
At this time, Bandwidth has a nice Growth Score of B, however its Momentum Score is doing a bit better with an A. However, the stock was allocated a grade of D on the value side, putting it in the bottom 40% for this investment strategy.
Overall, the stock has an aggregate VGM Score of C. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Estimates have been trending upward for the stock, and the magnitude of these revisions looks promising. Notably, Bandwidth has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.