Bandwidth (NASDAQ:BAND) Announces Quarterly Earnings Results, Beats Expectations By $0.01 EPS

Bandwidth (NASDAQ:BAND) posted its quarterly earnings data on Wednesday. The company reported $0.37 earnings per share (EPS) for the quarter, topping the consensus estimate of $0.36 by $0.01, FiscalAI reports. Bandwidth had a positive return on equity of 1.47% and a negative net margin of 0.64%.The company had revenue of $219.90 million for the quarter, compared to analysts’ expectations of $217.04 million. Bandwidth’s revenue was up 22.2% on a year-over-year basis. Bandwidth updated its Q3 2026 guidance to 0.450-0.490 EPS and its FY 2026 guidance to 1.710-1.790 EPS.

Here are the key takeaways from Bandwidth’s conference call:

• Q2 exceeded expectations, with revenue up 22% year over year to $220 million, adjusted EBITDA up 27% to $28 million, record 18.3% EBITDA margin, and free cash flow of $24 million.
• AI-driven demand is producing larger customer opportunities, including five new or expanded $1 million-plus contracts in Q2; 100% included Maestro or AI services, while commercial net revenue retention reached 113% and customer name retention remained above 99%.
• Bandwidth raised its full-year 2026 outlook to $900 million-$910 million of revenue and $123 million-$125 million of adjusted EBITDA, citing enterprise customer deployments, Salesforce Agentforce activity, and margin benefits from its owned network.
• Salesforce traffic has begun flowing, but management excluded future Salesforce contributions and the ramp of five recent enterprise wins from its guidance, suggesting potential upside but also uncertainty around deployment timing.
• The company lowered its expected political campaign revenue contribution to $13 million from approximately $15 million, and the new convertible notes increased the estimated diluted share count, contributing to a more modest full-year EPS outlook of $1.71-$1.79.

Bandwidth Trading Down 27.7%

BAND stock traded down $14.46 during trading on Wednesday, reaching $37.79. 2,841,382 shares of the stock were exchanged, compared to its average volume of 857,140. The business has a 50 day moving average price of $62.60 and a 200-day moving average price of $35.34. The firm has a market capitalization of $1.21 billion, a price-to-earnings ratio of -99.98 and a beta of 2.92. The company has a current ratio of 0.94, a quick ratio of 0.94 and a debt-to-equity ratio of 0.37. Bandwidth has a 1 year low of $12.50 and a 1 year high of $79.08.

Insider Activity at Bandwidth

In other Bandwidth news, COO Devesh Agarwal sold 4,066 shares of Bandwidth stock in a transaction on Friday, May 29th. The stock was sold at an average price of $58.85, for a total value of $239,284.10. Following the sale, the chief operating officer owned 68,579 shares in the company, valued at $4,035,874.15. The trade was a 5.60% decrease in their ownership of the stock. The transaction was disclosed in a document filed with the Securities & Exchange Commission, which is available through the SEC website. Also, CFO Daryl E. Raiford sold 4,228 shares of the company’s stock in a transaction on Monday, June 1st. The shares were sold at an average price of $64.15, for a total value of $271,226.20. Following the completion of the transaction, the chief financial officer directly owned 42,919 shares in the company, valued at approximately $2,753,253.85. This trade represents a 8.97% decrease in their position. The disclosure for this sale is available in the SEC filing. Insiders have sold 127,269 shares of company stock valued at $7,192,523 over the last 90 days. Corporate insiders own 5.26% of the company’s stock.

Institutional Inflows and Outflows

Hedge funds have recently bought and sold shares of the stock. Rhumbline Advisers lifted its stake in Bandwidth by 15.0% during the second quarter. Rhumbline Advisers now owns 40,927 shares of the company’s stock worth $651,000 after purchasing an additional 5,324 shares in the last quarter. Quantbot Technologies LP purchased a new stake in shares of Bandwidth in the 2nd quarter valued at $128,000. Arrowstreet Capital Limited Partnership lifted its stake in Bandwidth by 26.6% during the 2nd quarter. Arrowstreet Capital Limited Partnership now owns 373,153 shares of the company’s stock worth $5,933,000 after acquiring an additional 78,360 shares in the last quarter. Invesco Ltd. lifted its stake in Bandwidth by 4.7% during the 2nd quarter. Invesco Ltd. now owns 56,367 shares of the company’s stock worth $896,000 after acquiring an additional 2,532 shares in the last quarter. Finally, Jump Financial LLC purchased a new position in Bandwidth during the 2nd quarter valued at about $221,000. Hedge funds and other institutional investors own 68.53% of the company’s stock.

Key Stories Impacting Bandwidth

Here are the key news stories impacting Bandwidth this week:

• Positive Sentiment: Second-quarter revenue reached approximately $220 million, up 22% year over year, while adjusted EBITDA increased 27% to $28 million. The company also reported a record 18% adjusted EBITDA margin. Bandwidth Announces Second Quarter 2026 Financial Results
• Positive Sentiment: Bandwidth earned $0.37 per share, exceeding the $0.36 consensus estimate, and revenue of $219.9 million surpassed expectations of $217.0 million. Bandwidth Q2 Earnings and Revenues Surpass Estimates
• Positive Sentiment: Management raised third-quarter guidance to $231 million-$235 million in revenue and $0.45-$0.49 in EPS, above analyst estimates of $223.6 million and $0.40, respectively. Full-year 2026 guidance also increased to $900 million-$910 million in revenue and $1.71-$1.79 in EPS, above consensus. Bandwidth Q2 Earnings Top Estimates on Strong AI-Driven Demand
• Positive Sentiment: Demand for voice-AI communications, enterprise modernization, and strategic customer wins of more than $1 million are supporting the company’s growth outlook.
• Neutral Sentiment: The quarterly EPS result declined slightly from $0.38 a year earlier, despite the company’s strong revenue growth and higher guidance.
• Negative Sentiment: Shares decreased sharply on unusually heavy trading volume, suggesting that investors may have been selling into the earnings strength or viewing the results as insufficient relative to elevated expectations. Bandwidth also remains marginally unprofitable, with a negative net margin, and its high beta indicates substantial volatility.

Wall Street Analyst Weigh In

Several equities analysts have recently weighed in on the company. Zacks Research downgraded Bandwidth from a “strong-buy” rating to a “hold” rating in a research report on Friday, July 3rd. Citigroup reissued a “market outperform” rating on shares of Bandwidth in a research note on Monday, July 20th. Needham & Company LLC raised their price objective on Bandwidth from $45.00 to $60.00 and gave the company a “buy” rating in a report on Thursday, May 14th. Citizens Jmp raised their price objective on Bandwidth from $70.00 to $86.00 and gave the company a “market outperform” rating in a report on Monday, July 20th. Finally, Wall Street Zen cut shares of Bandwidth from a “strong-buy” rating to a “buy” rating in a research note on Sunday, June 28th. Five analysts have rated the stock with a Buy rating, one has given a Hold rating and one has assigned a Sell rating to the stock. Based on data from MarketBeat, the stock currently has a consensus rating of “Moderate Buy” and an average price target of $61.75.

About Bandwidth

Bandwidth Inc operates a cloud-based communications platform that provides voice, messaging and emergency services APIs for enterprises and developers. Through its proprietary network and software-as-a-service model, the company enables customers to integrate programmable voice calls, text messaging and 9-1-1 routing into their applications. Bandwidth’s solutions aim to reduce complexity and improve reliability in mission-critical communications, serving industries such as healthcare, financial services, on-demand mobility and customer engagement.

Founded in 1999 in Raleigh, North Carolina by co-founders David Morken and Henry Kaestner, Bandwidth initially focused on voice-over-IP infrastructure before evolving into a full communications API provider.