Bandwidth Q3 Earnings Fall Short of Estimates, Revenues Decline

Bandwidth Inc. BAND reported mixed third-quarter 2025 results, with the top line surpassing the Zacks Consensus Estimate but the bottom line missing the same.The company’s revenues declined slightly, owing to lower revenues from political campaign messaging. However, acceleration in software-driven revenue and strength across core voice offerings largely reversed the decline. To drive growth, it plans to focus on winning large enterprises and become the leading global CPaaS (Communications Platform as a Service) platform for scaling digital engagement. A strong focus on strengthening profitability and expanding cash flow generation is a positive factor.BAND’s Quarter DetailsOn a GAAP basis, net loss during the quarter was $1.24 million or a loss of 4 cents per share against a net income of $0.41 million or a penny per share in the prior-year quarter. The decline was attributed to a net sales decline and higher operating expenses. Excluding non-recurring items, non-GAAP net income during the reported quarter was $11.4 million or 36 cents per share compared with $12.8 million or 43 cents per share in the prior-year quarter. The bottom line missed the Zacks Consensus Estimate of 38 cents.Bandwidth Inc. Price, Consensus and EPS Surprise Bandwidth Inc. price-consensus-eps-surprise-chart | Bandwidth Inc. QuoteQuarterly revenues declined to $191.9 million from $193.9 million in the prior-year quarter. The decline was due to lower revenues from political campaign messaging. However, it was mostly reversed by high demand for digital engagement and strong contributions from messaging services across various use cases, including healthcare and financial services. The top line exceeded the consensus estimate of $189.8 million. Bandwidth’s Maestro and AI Bridge, which allows for the seamless integration of preferred voice agents, are gaining popularity.BAND’s Operating DetailsNon-GAAP gross margin during the quarter was 58%, matching the prior year quarter’s figure. Favorable product mix propelled the gross margin. Adjusted EBITDA was $24.3 million, above the guidance and up from $24 million in the prior-year period.Cash Flow & Liquidity for BANDIn the September quarter, net cash from operating activities was $50.9 million compared with a cash generation of $47.4 million in the prior year. Cash and cash equivalents, as of Sept. 30, 2025, were $73.4 million, with convertible senior notes of $247.3 million.BAND’s GuidanceBacked by strong momentum, Bandwidth expects continued growth, with a focus on strategic investments and strengthening its capital structure. Revenues for 2025 are anticipated to be in the band of $747-760 million, indicating 9-11% year-over-year growth. Management currently forecasts adjusted EBITDA in the range of $89-92 million compared to the prior estimation of $86-$91 million.The company expects growing adoption of voice AI and strength in software revenues will likely drive the overall revenue growth in the fourth quarter.Zacks Rank & Stocks to ConsiderBandwidth currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.Upcoming ReleasesArista Networks Inc. ANET is scheduled to release third-quarter 2025 earnings on Nov. 5. The Zacks Consensus Estimate for earnings is pegged at 72 cents per share, suggesting growth of 20% from the year-ago reported figure.Arista has a long-term earnings growth expectation of 18.7%. The company delivered an average earnings surprise of 12.8% in the last four reported quarters.Akamai Technologies, Inc. AKAM is slated to release third-quarter 2025 earnings on Nov. 6. The Zacks Consensus Estimate for earnings is pegged at $1.64 per share, indicating 3.1% growth from the year-ago reported figure.Akamai has a long-term earnings growth expectation of 4.9%. The company delivered an average earnings surprise of 7.1% in the last four reported quarters.Pinterest, Inc. PINS is set to release third-quarter 2025 earnings on Nov. 4. The Zacks Consensus Estimate for earnings is pegged at 42 cents per share, implying growth of 5% from the year-ago reported figure.Pinterest has a long-term earnings growth expectation of 33.9%. The company delivered an average negative earnings surprise of 1.1% in the last four reported quarters.Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Akamai Technologies, Inc. (AKAM): Free Stock Analysis Report Arista Networks, Inc. (ANET): Free Stock Analysis Report Bandwidth Inc. (BAND): Free Stock Analysis Report Pinterest, Inc. (PINS): Free Stock Analysis ReportThis article originally published on Zacks Investment Research (zacks.com).Zacks Investment ResearchWeiter zum vollständigen Artikel bei Zacks Weiter zum vollständigen Artikel bei Zacks