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Bandwidth Inc. (BAND - Free Report) reported strong first-quarter 2024 results, beating 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 (Communications Platform as a Service) platform for scaling digital engagement.
Quarter Details
On a GAAP basis, net loss during the quarter was $9.2 million or a loss of 35 cents per share against a net income of $3.6 million or 14 cents per share in the prior-year quarter. Higher operating expenses and a decrease in other income, net affected net income during the quarter.
Excluding non-recurring items, non-GAAP net income during the reported quarter was $8.1 million or 27 cents per share compared with $1.5 million or 5 cents per share in the prior-year quarter. The bottom line beat the Zacks Consensus Estimate by 6 cents.
Quarterly revenues improved to $171 million from $137.8 million in the prior-year quarter. The growth was backed by high demand for digital engagement and strong contributions from messaging services across a variety of use cases, including health care, aviation, retail and e-commerce shopping, fintech and civic engagement. The top line exceeded the consensus estimate of $163 million.
The company witnessed healthy demand across all three market categories. The programmable service category grew 49% year over year, driven by solid demand from commercial clients in e-commerce, financial services and health care. An increase in political campaign messaging also supported revenues in this category. Global communication plans revenues grew 4% year over year, while the direct-to-enterprise customer category reported 20% year-over-year revenue growth.
Operating Details
Non-GAAP gross margin during the quarter was 57%, up from 54% a year ago. The gross margin improved as net sales growth outpaced the higher cost of revenues. The company witnessed solid growth in profitability, backed by strong performance in all three market offerings. Adjusted EBITDA was $15.9 million, well above the guidance and up from $5.1 million in the prior-year period.
Cash Flow & Liquidity
In the March quarter, net cash from operating activities was $2.5 million against cash utilization of $6.4 million in the prior year. Cash and cash equivalents as of Mar 31, 2024, were $105.4 million, with convertible senior notes of $419 million.
Guidance Up
Backed by strong momentum, Bandwidth expects revenues for 2024 in the band of $710-720 million, up from $695-705 million expected earlier. Adjusted EBITDA is now expected in the range of $72-76 million, up from the prior estimation of $70-74 million.
For the second quarter, revenues are expected to be $171-$175 million. Adjusted EBITDA is anticipated in the band of $15 million to $17 million.
Zacks Rank & Stocks to Consider
Bandwidth currently carries a Zacks Rank #4 (Sell).
Pinterest is increasingly establishing a unique value proposition to advertisers that could provide a competitive advantage in the long haul. Through various innovations, it continues to dramatically improve the advertising platform, which appears to be one of the best ad platforms for consumer discretionary brands looking for ways to reach customers and stretch smaller ad budgets.
Arista Networks, Inc. (ANET - Free Report) , carrying a Zacks Rank #2 at present, is likely to benefit from strong momentum and diversification across its top verticals and product lines. The company has a software-driven, data-centric approach to help customers build their cloud architecture and enhance their cloud experience. Arista has a long-term earnings growth expectation of 17.5% and delivered an earnings surprise of 15.39%, on average, in the trailing four quarters.
It holds a leadership position in 100-gigabit Ethernet switching share in port for the high-speed datacenter segment. Arista is increasingly gaining market traction in 200 and 400-gig high-performance switching products and remains well-positioned for healthy growth in data-driven cloud networking business with proactive platforms and predictive operations.
Silicon Motion Technology Corporation (SIMO - Free Report) , carrying a Zacks Rank #2 at present, delivered a trailing four-quarter average earnings surprise of 4.72%.
It is a leading developer of microcontroller ICs for NAND flash storage devices. The semiconductor company also designs, develops and markets high-performance, low-power semiconductor solutions for original equipment manufacturers (“OEM”) and other customers.
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Bandwidth (BAND) Q1 Earnings Beat, 2024 Guidance Raised
Bandwidth Inc. (BAND - Free Report) reported strong first-quarter 2024 results, beating 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 (Communications Platform as a Service) platform for scaling digital engagement.
Quarter Details
On a GAAP basis, net loss during the quarter was $9.2 million or a loss of 35 cents per share against a net income of $3.6 million or 14 cents per share in the prior-year quarter. Higher operating expenses and a decrease in other income, net affected net income during the quarter.
Excluding non-recurring items, non-GAAP net income during the reported quarter was $8.1 million or 27 cents per share compared with $1.5 million or 5 cents per share in the prior-year quarter. The bottom line beat the Zacks Consensus Estimate by 6 cents.
Bandwidth Inc. Price, Consensus and EPS Surprise
Bandwidth Inc. price-consensus-eps-surprise-chart | Bandwidth Inc. Quote
Quarterly revenues improved to $171 million from $137.8 million in the prior-year quarter. The growth was backed by high demand for digital engagement and strong contributions from messaging services across a variety of use cases, including health care, aviation, retail and e-commerce shopping, fintech and civic engagement. The top line exceeded the consensus estimate of $163 million.
The company witnessed healthy demand across all three market categories. The programmable service category grew 49% year over year, driven by solid demand from commercial clients in e-commerce, financial services and health care. An increase in political campaign messaging also supported revenues in this category. Global communication plans revenues grew 4% year over year, while the direct-to-enterprise customer category reported 20% year-over-year revenue growth.
Operating Details
Non-GAAP gross margin during the quarter was 57%, up from 54% a year ago. The gross margin improved as net sales growth outpaced the higher cost of revenues. The company witnessed solid growth in profitability, backed by strong performance in all three market offerings. Adjusted EBITDA was $15.9 million, well above the guidance and up from $5.1 million in the prior-year period.
Cash Flow & Liquidity
In the March quarter, net cash from operating activities was $2.5 million against cash utilization of $6.4 million in the prior year. Cash and cash equivalents as of Mar 31, 2024, were $105.4 million, with convertible senior notes of $419 million.
Guidance Up
Backed by strong momentum, Bandwidth expects revenues for 2024 in the band of $710-720 million, up from $695-705 million expected earlier. Adjusted EBITDA is now expected in the range of $72-76 million, up from the prior estimation of $70-74 million.
For the second quarter, revenues are expected to be $171-$175 million. Adjusted EBITDA is anticipated in the band of $15 million to $17 million.
Zacks Rank & Stocks to Consider
Bandwidth currently carries a Zacks Rank #4 (Sell).
Pinterest (PINS - Free Report) , carrying a Zacks Rank #2 (Buy) at present, delivered a trailing four-quarter average earnings surprise of 38.78%. In the last reported quarter, it delivered an earnings surprise of 42.86%. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Pinterest is increasingly establishing a unique value proposition to advertisers that could provide a competitive advantage in the long haul. Through various innovations, it continues to dramatically improve the advertising platform, which appears to be one of the best ad platforms for consumer discretionary brands looking for ways to reach customers and stretch smaller ad budgets.
Arista Networks, Inc. (ANET - Free Report) , carrying a Zacks Rank #2 at present, is likely to benefit from strong momentum and diversification across its top verticals and product lines. The company has a software-driven, data-centric approach to help customers build their cloud architecture and enhance their cloud experience. Arista has a long-term earnings growth expectation of 17.5% and delivered an earnings surprise of 15.39%, on average, in the trailing four quarters.
It holds a leadership position in 100-gigabit Ethernet switching share in port for the high-speed datacenter segment. Arista is increasingly gaining market traction in 200 and 400-gig high-performance switching products and remains well-positioned for healthy growth in data-driven cloud networking business with proactive platforms and predictive operations.
Silicon Motion Technology Corporation (SIMO - Free Report) , carrying a Zacks Rank #2 at present, delivered a trailing four-quarter average earnings surprise of 4.72%.
It is a leading developer of microcontroller ICs for NAND flash storage devices. The semiconductor company also designs, develops and markets high-performance, low-power semiconductor solutions for original equipment manufacturers (“OEM”) and other customers.