Communications platform-as-a-service company Bandwidth (NASDAQ: BAND) will be reporting earnings tomorrow before the bell. Here’s what to expect.
Bandwidth beat analysts’ revenue expectations by 3% last quarter, reporting revenues of $210 million, up 27% year on year. It was a weaker quarter for the company, with full-year guidance of slowing revenue growth and a poor net revenue retention rate.
Is Bandwidth a buy or sell going into earnings? Read our full analysis here, it’s free.
This quarter, analysts are expecting Bandwidth’s revenue to decline 1.2% year on year to $168.9 million, a reversal from the 24.1% increase it recorded in the same quarter last year. Adjusted earnings are expected to come in at $0.27 per share.
Analysts covering the company have generally reconfirmed their estimates over the last 30 days, suggesting they anticipate the business to stay the course heading into earnings. Bandwidth has a history of exceeding Wall Street’s expectations, beating revenue estimates every single time over the past two years by 3.7% on average.
Looking at Bandwidth’s peers in the software development segment, some have already reported their Q1 results, giving us a hint as to what we can expect. Twilio delivered year-on-year revenue growth of 12%, beating analysts’ expectations by 2.6%, and F5 reported revenues up 7.3%, topping estimates by 1.7%. Twilio traded up 2.2% following the results while F5’s stock price was unchanged.
Read our full analysis of Twilio’s results here and F5’s results here.
There has been positive sentiment among investors in the software development segment, with share prices up 15% on average over the last month. Bandwidth is up 1.8% during the same time and is heading into earnings with an average analyst price target of $20.60 (compared to the current share price of $12.39).
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