Bandwidth delivered a positive first quarter, with management attributing the results to robust demand across its core cloud communications offerings and disciplined execution. CEO David Morken highlighted that the Enterprise Voice business was a key growth driver, benefiting from increased adoption of the Maestro and AI Bridge platforms. Notable wins in the healthcare sector and expanding channel partnerships supported performance, while management noted resilience in regulated verticals. CFO Daryl Raiford pointed out that healthy customer retention and higher average annual revenue per customer also contributed to the quarter’s outcome.
Is now the time to buy BAND? Find out in our full research report (it’s free).
Bandwidth (BAND) Q1 CY2025 Highlights:
- Revenue: $174.2 million vs analyst estimates of $168.9 million (1.9% year-on-year growth, 3.1% beat)
- Adjusted EPS: $0.36 vs analyst estimates of $0.27 (33.3% beat)
- Adjusted Operating Income: $15.46 million vs analyst estimates of $11.96 million (8.9% margin, 29.3% beat)
- The company slightly lifted its revenue guidance for the full year to $752.5 million at the midpoint from $750 million
- EBITDA guidance for the full year is $87.5 million at the midpoint, above analyst estimates of $86.38 million
- Operating Margin: -2.7%, up from -6.1% in the same quarter last year
- Market Capitalization: $477.7 million
While we enjoy listening to the management's commentary, our favorite part of earnings calls are the analyst questions. Those are unscripted and can often highlight topics that management teams would rather avoid or topics where the answer is complicated. Here is what has caught our attention.
Our Top 5 Analyst Questions Bandwidth’s Q1 Earnings Call
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Arjun Bhatia (William Blair) asked about Enterprise Voice pipeline sustainability and go-to-market strategy. CEO David Morken highlighted a record number of large deals and a dual approach of direct sales and expanding partnerships with managed service providers.
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Arjun Bhatia (William Blair) inquired about expected performance in the second half of the year and risk from macro volatility. CFO Daryl Raiford explained contingency planning and noted the relative resilience of the voice business versus more cyclical messaging.
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Meta Marshall (Morgan Stanley) requested details on drivers behind rising average revenue per customer. Morken cited broader Maestro and AI Bridge adoption, cross-selling, and higher utilization in hybrid deployments.
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Meta Marshall (Morgan Stanley) asked about the sustainability of gross margin improvements. Raiford stated margins are expected to remain at current levels through the year and reaffirmed medium-term targets.
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James Fish (Piper Sandler) questioned the growth outlook for programmable messaging and strategies to boost awareness and regain share. Chief Product Officer John Bell emphasized expanding into new messaging formats, targeting larger enterprise customers, and maintaining high service levels.
Catalysts in Upcoming Quarters
In the coming quarters, our analysts will track (1) the pace of enterprise adoption for Maestro and AI Bridge platforms, (2) execution and expansion of channel partnerships to drive large enterprise deals, and (3) resilience of programmable messaging growth amid macroeconomic uncertainty. We will also monitor progress in regulated verticals and the impact of AI integrations on retention and revenue per customer.
Bandwidth currently trades at $16.02, up from $12.29 just before the earnings. At this price, is it a buy or sell? The answer lies in our full research report (it’s free).
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