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Bandwidth (BAND) Tops Q4 Earnings Estimates on Solid Revenues
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Bandwidth Inc. (BAND - Free Report) reported solid fourth-quarter 2022 results, beating both the top-line and bottom-line estimates and well exceeding its guided range. The strong performance was backed by enterprises increasingly relying on Bandwidth’s platform for communications in the cloud. In order to drive growth, the company plans to focus on winning large enterprises and becoming the best global CPaaS platform for scaling digital engagement.
Quarter Details
On a GAAP basis, net income during the quarter was $33.4 million against a loss of $8.2 million in the prior-year quarter. Non-GAAP net income during the reported quarter was $5.3 million or 19 cents per share compared with $2.3 million or 9 cents per share in the prior-year quarter. Non-GAAP earnings beat the Zacks Consensus Estimate by 15 cents.
In 2022, GAAP net income was $19.6 million against a loss of $27.4 million in 2021. Non-GAAP net income in 2022 was $15 million or 54 cents per share compared with $25.7 million or 97 cents per share in 2021.
Quarterly revenues improved to $157 million from $126.1 million in the prior-year quarter and exceeded the consensus estimate of $147 million. The growth was backed by high demand for digital engagement and strong contributions from messaging services. In 2022, revenues were up to $573.2 million from $490.9 million in 2021.
Operating Details
Non-GAAP gross margin during the quarter was 56%, reflecting growth of 3 percentage points, primarily due to efficient pricing and product mix and continued excellent execution within the cloud operations and service groups. Adjusted EBITDA was relatively flat at $8.3 million.
Cash Flow & Liquidity
In 2022, net cash from operating activities was $34.9 million compared with $40.8 million in the prior year. Cash and cash equivalents as of Dec 31, 2022, were $113.6 million, with accrued expenses and other current liabilities of $62.6 million compared with respective tallies of $331.5 million and $65.9 million a year ago.
Guidance
For 2023, Bandwidth currently expects revenues in the band of $576 million to $584 million. Adjusted EBITDA is expected in the range of $43 million to $47 million.
For the first quarter, revenues are expected to be within 132 million to $134 million. Adjusted EBITDA is expected in the band of $4 million to $6 million.
Arista Networks, Inc. (ANET - Free Report) , sporting a Zacks Rank #1, is likely to benefit from the strong momentum and diversification across its top verticals and product lines. The company has a software-driven, data-centric approach to help customers build their cloud architecture and enhance their cloud experience. Arista has a long-term earnings growth expectation of 17.5% and delivered an earnings surprise of 12.7%, on average, in the trailing four quarters.
It holds a leadership position in 100-gigabit Ethernet switching share in port for the high-speed datacenter segment. Arista is increasingly gaining market traction in 200- and 400-gig high-performance switching products and remains well-positioned for healthy growth in data-driven cloud networking business with proactive platforms and predictive operations.
Viavi Solutions Inc. (VIAV - Free Report) , carrying a Zacks Rank #2 (Buy), is a key pick. Headquartered in Scottsdale, AZ, Viavi is a leading provider of network test, monitoring and service enablement solutions to diverse sectors across the globe. The product portfolio of the company offers end-to-end network visibility and analytics that help build, test, certify, maintain, and optimize complex physical and virtual networks.
Viavi also offers high-performance thin film optical coatings for light-management solutions used in anti-counterfeiting, 3D sensing, electronics, automotive, defense and instrumentation markets. It delivered an earnings surprise of 9.1%, on average, in the trailing four quarters.
United States Cellular Corporation (USM - Free Report) , carrying a Zacks Rank #2, is another key pick. Headquartered in Chicago, IL, U.S. Cellular is the fourth largest full-service wireless carrier in the United States. The company provides a range of wireless products and services, and a high-quality network to increase the competitiveness of local businesses and improve efficiency of government operations.
U.S. Cellular has taken concrete steps to accelerate subscriber additions and improve churn management. It is bullish about the growing demand for smartphones, which enjoys significant market penetration, supporting growth in data revenues. U.S. Cellular anticipates healthy customer growth, additional demand for data and migration through equipment installment plans coupled with a competitive pricing environment.
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Bandwidth (BAND) Tops Q4 Earnings Estimates on Solid Revenues
Bandwidth Inc. (BAND - Free Report) reported solid fourth-quarter 2022 results, beating both the top-line and bottom-line estimates and well exceeding its guided range. The strong performance was backed by enterprises increasingly relying on Bandwidth’s platform for communications in the cloud. In order to drive growth, the company plans to focus on winning large enterprises and becoming the best global CPaaS platform for scaling digital engagement.
Quarter Details
On a GAAP basis, net income during the quarter was $33.4 million against a loss of $8.2 million in the prior-year quarter. Non-GAAP net income during the reported quarter was $5.3 million or 19 cents per share compared with $2.3 million or 9 cents per share in the prior-year quarter. Non-GAAP earnings beat the Zacks Consensus Estimate by 15 cents.
Bandwidth Inc. Price, Consensus and EPS Surprise
Bandwidth Inc. price-consensus-eps-surprise-chart | Bandwidth Inc. Quote
In 2022, GAAP net income was $19.6 million against a loss of $27.4 million in 2021. Non-GAAP net income in 2022 was $15 million or 54 cents per share compared with $25.7 million or 97 cents per share in 2021.
Quarterly revenues improved to $157 million from $126.1 million in the prior-year quarter and exceeded the consensus estimate of $147 million. The growth was backed by high demand for digital engagement and strong contributions from messaging services. In 2022, revenues were up to $573.2 million from $490.9 million in 2021.
Operating Details
Non-GAAP gross margin during the quarter was 56%, reflecting growth of 3 percentage points, primarily due to efficient pricing and product mix and continued excellent execution within the cloud operations and service groups. Adjusted EBITDA was relatively flat at $8.3 million.
Cash Flow & Liquidity
In 2022, net cash from operating activities was $34.9 million compared with $40.8 million in the prior year. Cash and cash equivalents as of Dec 31, 2022, were $113.6 million, with accrued expenses and other current liabilities of $62.6 million compared with respective tallies of $331.5 million and $65.9 million a year ago.
Guidance
For 2023, Bandwidth currently expects revenues in the band of $576 million to $584 million. Adjusted EBITDA is expected in the range of $43 million to $47 million.
For the first quarter, revenues are expected to be within 132 million to $134 million. Adjusted EBITDA is expected in the band of $4 million to $6 million.
Zacks Rank & Stocks to Consider
Bandwidth currently has a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Arista Networks, Inc. (ANET - Free Report) , sporting a Zacks Rank #1, is likely to benefit from the strong momentum and diversification across its top verticals and product lines. The company has a software-driven, data-centric approach to help customers build their cloud architecture and enhance their cloud experience. Arista has a long-term earnings growth expectation of 17.5% and delivered an earnings surprise of 12.7%, on average, in the trailing four quarters.
It holds a leadership position in 100-gigabit Ethernet switching share in port for the high-speed datacenter segment. Arista is increasingly gaining market traction in 200- and 400-gig high-performance switching products and remains well-positioned for healthy growth in data-driven cloud networking business with proactive platforms and predictive operations.
Viavi Solutions Inc. (VIAV - Free Report) , carrying a Zacks Rank #2 (Buy), is a key pick. Headquartered in Scottsdale, AZ, Viavi is a leading provider of network test, monitoring and service enablement solutions to diverse sectors across the globe. The product portfolio of the company offers end-to-end network visibility and analytics that help build, test, certify, maintain, and optimize complex physical and virtual networks.
Viavi also offers high-performance thin film optical coatings for light-management solutions used in anti-counterfeiting, 3D sensing, electronics, automotive, defense and instrumentation markets. It delivered an earnings surprise of 9.1%, on average, in the trailing four quarters.
United States Cellular Corporation (USM - Free Report) , carrying a Zacks Rank #2, is another key pick. Headquartered in Chicago, IL, U.S. Cellular is the fourth largest full-service wireless carrier in the United States. The company provides a range of wireless products and services, and a high-quality network to increase the competitiveness of local businesses and improve efficiency of government operations.
U.S. Cellular has taken concrete steps to accelerate subscriber additions and improve churn management. It is bullish about the growing demand for smartphones, which enjoys significant market penetration, supporting growth in data revenues. U.S. Cellular anticipates healthy customer growth, additional demand for data and migration through equipment installment plans coupled with a competitive pricing environment.