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Bandwidth Inc. (BAND - Free Report) reported solid third-quarter 2022 results, beating both the top-line and bottom-line estimates and well exceeding its guided range. The strong performance was backed by enterprises increasingly relying on Bandwidth’s platform for communications in the cloud. In order to drive growth, the company plans to focus on winning large enterprises and becoming the best global CPaaS platform for scaling digital engagement.
Quarter Details
On a GAAP basis, the net loss during the quarter was $0.8 million or a loss of 3 cents per share compared with a loss of $6.9 million or a loss of 28 cents per share in the prior-year quarter. Non-GAAP net income during the reported quarter was $8 million or 27 cents per share compared with net income of $6.5 million or 25 cents per share in the prior-year quarter. Non-GAAP earnings beat the Zacks Consensus Estimate by 24 cents.
Revenues improved to $148.3 million from $130.6 million in the prior-year quarter and exceeded the consensus estimate of $141 million. The growth was backed by high demand for digital engagement and strong contributions from monthly recurring charges for phone numbers and emergency services.
Operating Details
Non-GAAP gross margin during the quarter was 57%, reflecting growth of 3 percentage points, primarily due to efficient pricing and product mix and continued excellent execution within the cloud operations and service groups. Adjusted EBIDTA was $12.8 million compared with $14.2 million a year ago.
Cash Flow & Liquidity
In the first nine months of 2022, net cash from operating activities was $24.3 million compared with $23.7 million in the prior-year quarter. Cash and cash equivalents at the end of the quarter were $166.4 million, with accrued expenses and other current liabilities of $75.1 million.
Guidance Up
Backed by robust quarterly results, Bandwidth revised its outlook for 2022. It currently expects revenues in the band of $562 million to $564 million, up from prior expectations of $551 million to $557 million. Non-GAAP earnings per share are expected in the band of 35 cents to 37 cents per share, up from the prior range of 10 cents to 14 cents per share.
For the fourth quarter, revenues are expected to be in the band of $146 million to $148 million. Non-GAAP earnings are expected to be within 3-5 cents per share.
TESSCO Technologies Incorporated , sporting a Zacks Rank #1, delivered an earnings surprise of 61.9%, on average, in the trailing four quarters. Earnings estimates for TESSCO for the current year have moved up 49.4% since August 2021.
TESSCO offers products to the industry’s top manufacturers in mobile communications, Wi-Fi, wireless backhaul and related products. With more than three decades of experience, it delivers complete end-to-end solutions to the wireless industry.
Ooma Inc. (OOMA - Free Report) , carrying a Zacks Rank #2 (Buy), delivered an earnings surprise of 34.7%, on average, in the trailing four quarters. Earnings estimates for Ooma for the current year have moved up 5.4% since March 2022.
Ooma offers communications services and related technologies for businesses and consumers in the United States and Canada. It helps to create powerful connected experiences for businesses and consumers through its smart cloud-based SaaS platform.
Viavi Solutions Inc. (VIAV - Free Report) , carrying a Zacks Rank #2, is a solid pick for investors in the broader industry. It delivered a modest earnings surprise of 12.4%, on average, in the trailing four quarters.
Earnings estimates for the current year for Viavi have moved up 7.9% since October 2021, while that for the next year is up 18.7%. It boasts a comprehensive product portfolio that offers end-to-end network visibility and analytics that help build, test, certify, maintain and optimize complex physical and virtual networks. Viavi expects growth to be driven by the secular demand for 5G wireless, fiber and 3D sensing.
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Bandwidth (BAND) Tops Q3 Earnings Estimates, Revises View
Bandwidth Inc. (BAND - Free Report) reported solid third-quarter 2022 results, beating both the top-line and bottom-line estimates and well exceeding its guided range. The strong performance was backed by enterprises increasingly relying on Bandwidth’s platform for communications in the cloud. In order to drive growth, the company plans to focus on winning large enterprises and becoming the best global CPaaS platform for scaling digital engagement.
Quarter Details
On a GAAP basis, the net loss during the quarter was $0.8 million or a loss of 3 cents per share compared with a loss of $6.9 million or a loss of 28 cents per share in the prior-year quarter. Non-GAAP net income during the reported quarter was $8 million or 27 cents per share compared with net income of $6.5 million or 25 cents per share in the prior-year quarter. Non-GAAP earnings beat the Zacks Consensus Estimate by 24 cents.
Bandwidth Inc. Price, Consensus and EPS Surprise
Bandwidth Inc. price-consensus-eps-surprise-chart | Bandwidth Inc. Quote
Revenues improved to $148.3 million from $130.6 million in the prior-year quarter and exceeded the consensus estimate of $141 million. The growth was backed by high demand for digital engagement and strong contributions from monthly recurring charges for phone numbers and emergency services.
Operating Details
Non-GAAP gross margin during the quarter was 57%, reflecting growth of 3 percentage points, primarily due to efficient pricing and product mix and continued excellent execution within the cloud operations and service groups. Adjusted EBIDTA was $12.8 million compared with $14.2 million a year ago.
Cash Flow & Liquidity
In the first nine months of 2022, net cash from operating activities was $24.3 million compared with $23.7 million in the prior-year quarter. Cash and cash equivalents at the end of the quarter were $166.4 million, with accrued expenses and other current liabilities of $75.1 million.
Guidance Up
Backed by robust quarterly results, Bandwidth revised its outlook for 2022. It currently expects revenues in the band of $562 million to $564 million, up from prior expectations of $551 million to $557 million. Non-GAAP earnings per share are expected in the band of 35 cents to 37 cents per share, up from the prior range of 10 cents to 14 cents per share.
For the fourth quarter, revenues are expected to be in the band of $146 million to $148 million. Non-GAAP earnings are expected to be within 3-5 cents per share.
Zacks Rank & Stocks to Consider
Bandwidth currently has a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
TESSCO Technologies Incorporated , sporting a Zacks Rank #1, delivered an earnings surprise of 61.9%, on average, in the trailing four quarters. Earnings estimates for TESSCO for the current year have moved up 49.4% since August 2021.
TESSCO offers products to the industry’s top manufacturers in mobile communications, Wi-Fi, wireless backhaul and related products. With more than three decades of experience, it delivers complete end-to-end solutions to the wireless industry.
Ooma Inc. (OOMA - Free Report) , carrying a Zacks Rank #2 (Buy), delivered an earnings surprise of 34.7%, on average, in the trailing four quarters. Earnings estimates for Ooma for the current year have moved up 5.4% since March 2022.
Ooma offers communications services and related technologies for businesses and consumers in the United States and Canada. It helps to create powerful connected experiences for businesses and consumers through its smart cloud-based SaaS platform.
Viavi Solutions Inc. (VIAV - Free Report) , carrying a Zacks Rank #2, is a solid pick for investors in the broader industry. It delivered a modest earnings surprise of 12.4%, on average, in the trailing four quarters.
Earnings estimates for the current year for Viavi have moved up 7.9% since October 2021, while that for the next year is up 18.7%. It boasts a comprehensive product portfolio that offers end-to-end network visibility and analytics that help build, test, certify, maintain and optimize complex physical and virtual networks. Viavi expects growth to be driven by the secular demand for 5G wireless, fiber and 3D sensing.