Bandwidth (NASDAQ:BAND) Posts Earnings Results, Beats Estimates By $0.01 EPS

Bandwidth (NASDAQ:BAND) released its quarterly earnings results on Wednesday. The company reported $0.37 EPS for the quarter, topping the consensus estimate of $0.36 by $0.01, FiscalAI reports. The firm had revenue of $219.90 million during the quarter, compared to analyst estimates of $217.04 million. Bandwidth had a positive return on equity of 1.47% and a negative net margin of 0.64%.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 Stock Performance

Shares of BAND traded up $2.03 during trading hours on Thursday, reaching $38.98. 1,063,389 shares of the company traded hands, compared to its average volume of 870,356. The company has a quick ratio of 0.94, a current ratio of 0.94 and a debt-to-equity ratio of 0.37. The business has a fifty day moving average price of $62.18 and a 200-day moving average price of $35.50. Bandwidth has a 12-month low of $12.50 and a 12-month high of $79.08. The stock has a market capitalization of $1.25 billion, a P/E ratio of -102.58 and a beta of 2.92.

Key Stories Impacting Bandwidth

Here are the key news stories impacting Bandwidth this week:

• Positive Sentiment: Q2 results exceeded expectations: Bandwidth reported revenue of $219.9 million, up 22.2% year over year and above the $217.0 million consensus estimate. Non-GAAP earnings of $0.37 per share also topped expectations of $0.36. Adjusted EBITDA rose 27% to $28 million, producing a record 18% margin. Bandwidth Announces Second Quarter 2026 Financial Results
• Positive Sentiment: Higher outlook: Management raised its 2026 revenue forecast to $900 million-$910 million, versus a prior consensus estimate of $891 million, and increased adjusted EBITDA guidance to $123 million-$125 million. Third-quarter revenue and EPS guidance also came in above analyst expectations. Bandwidth Raises 2026 Revenue and EBITDA Outlook
• Positive Sentiment: AI and enterprise momentum: Voice AI adoption is increasing demand for Bandwidth’s communications platform, while larger strategic customer wins—including deals worth more than $1 million—support expectations for continued growth. Management also cited improving retention rates and stronger business fundamentals. Bandwidth Q2 Earnings Call Highlights AI Shift
• Neutral Sentiment: Mixed earnings reaction: Although sales, EBITDA and guidance were strong, earnings were slightly below the year-ago $0.38 per share, and the company continues to report a small negative net margin. Investors are weighing improving cash profitability against the need for sustained execution.
• Negative Sentiment: Earlier selloff and guidance concerns: Reports highlighting a decline in non-GAAP EPS and a reduction in a component of the 2026 EPS outlook triggered a steep post-earnings selloff. The reaction underscored concerns about valuation, profitability and whether AI-driven growth will translate into consistent earnings expansion. Why Bandwidth Stock Is Nosediving

Insider Buying and Selling

In other news, insider Rebecca Bottorff sold 9,425 shares of the stock in a transaction dated Monday, May 4th. The stock was sold at an average price of $45.30, for a total value of $426,952.50. Following the transaction, the insider directly owned 50,535 shares of the company’s stock, valued at approximately $2,289,235.50. This represents a 15.72% decrease in their ownership of the stock. The sale was disclosed in a document filed with the Securities & Exchange Commission, which is accessible through the SEC website. Also, insider Kade Ross sold 20,000 shares of the firm’s stock in a transaction dated Monday, May 11th. The stock was sold at an average price of $51.56, for a total value of $1,031,200.00. Following the completion of the transaction, the insider owned 43,894 shares of the company’s stock, valued at approximately $2,263,174.64. The trade was a 31.30% decrease in their ownership of the stock. The SEC filing for this sale provides additional information. The transaction was executed under a pre-arranged Rule 10b5-1 trading plan. Insiders have sold a total of 117,269 shares of company stock worth $6,876,623 over the last three months. Corporate insiders own 5.26% of the company’s stock.

Hedge Funds Weigh In On Bandwidth

A number of institutional investors have recently bought and sold shares of the business. Vanguard Group Inc. lifted its stake in Bandwidth by 3.5% during the 3rd quarter. Vanguard Group Inc. now owns 1,988,533 shares of the company’s stock valued at $33,149,000 after acquiring an additional 67,428 shares during the period. Dimensional Fund Advisors LP raised its holdings in shares of Bandwidth by 2.1% during the third quarter. Dimensional Fund Advisors LP now owns 1,464,976 shares of the company’s stock worth $24,423,000 after purchasing an additional 30,248 shares during the last quarter. State Street Corp raised its holdings in shares of Bandwidth by 2.6% during the fourth quarter. State Street Corp now owns 649,426 shares of the company’s stock worth $10,034,000 after purchasing an additional 16,654 shares during the last quarter. Ameriprise Financial Inc. lifted its position in Bandwidth by 10.5% during the third quarter. Ameriprise Financial Inc. now owns 642,264 shares of the company’s stock valued at $10,707,000 after purchasing an additional 61,004 shares during the period. Finally, Goldman Sachs Group Inc. boosted its holdings in Bandwidth by 12.8% in the fourth quarter. Goldman Sachs Group Inc. now owns 609,762 shares of the company’s stock valued at $9,421,000 after purchasing an additional 69,418 shares during the last quarter. 68.53% of the stock is owned by hedge funds and other institutional investors.

Analyst Ratings Changes

Several equities analysts have issued reports on BAND shares. Needham & Company LLC lifted their target price on Bandwidth from $45.00 to $60.00 and gave the company a “buy” rating in a research note on Thursday, May 14th. B. Riley Financial raised their price target on shares of Bandwidth from $55.00 to $85.00 and gave the company a “buy” rating in a report on Thursday, July 9th. Weiss Ratings reaffirmed a “sell (d-)” rating on shares of Bandwidth in a research report on Friday, July 17th. Zacks Research lowered shares of Bandwidth from a “strong-buy” rating to a “hold” rating in a research note on Friday, July 3rd. Finally, Wall Street Zen cut shares of Bandwidth from a “strong-buy” rating to a “buy” rating in a research report on Sunday, June 28th. Five equities research analysts have rated the stock with a Buy rating, one has assigned a Hold rating and one has given a Sell rating to the company’s stock. According to MarketBeat, Bandwidth currently has an average rating of “Moderate Buy” and an average target price 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.