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Bandwidth, Inc. BAND reported impressive second-quarter 2025 results, with both the top and bottom lines surpassing the respective Zacks Consensus Estimate.
The strong performance was backed by enterprises increasingly relying on Bandwidth’s platform for cloud-based communications. To drive growth, the company 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.
On a GAAP basis, net loss during the quarter was $4.9 million or a loss of 16 cents per share compared with a net loss of $5 million or a loss of 17 cents per share in the prior-year quarter. The marginally narrower loss was attributable to top-line growth.
Excluding non-recurring items, non-GAAP net income during the reported quarter was $12.1 million or 38 cents per share compared with $9 million or 29 cents per share in the prior-year quarter. The bottom line beat the Zacks Consensus Estimate of 32 cents.
Bandwidth Inc. price-consensus-eps-surprise-chart | Bandwidth Inc. Quote
Quarterly revenues improved to $180 million from $174 million in the prior-year quarter. The growth was driven by high demand for digital engagement and strong contributions from messaging services across various use cases, including healthcare, IT services, fintech and civic engagement. The top line exceeded the consensus estimate of $179 million. Bandwidth’s Maestro and AI Bridge, which allows for the seamless integration of preferred voice agents, are gaining popularity.
Non-GAAP gross margin during the quarter was 58%, up from 56% a year ago. Favorable product mix and operational efficiency propelled the gross margin. Adjusted EBITDA was $22 million, well above the guidance and up from $19 million in the prior-year period.
In the June quarter, net cash from operating activities was $31.7 million compared with a cash generation of $24.4 million in the prior year. Cash and cash equivalents as of June 30, 2025, were $60.1 million, with convertible senior notes of $247 million.
Backed 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 $745-760 million, indicating 9-11% year-over-year growth. Management forecasts adjusted EBITDA in the range of $86-$91 million.
For the third quarter, revenues are expected to be between $189 million and $191 million. Adjusted EBITDA is anticipated to be in the band of $19 million-$21 million.
Bandwidth currently carries 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 is scheduled to release second-quarter 2025 earnings on Aug. 5. The Zacks Consensus Estimate for earnings is pegged at 65 cents per share, suggesting a growth of 25% from the year-ago reported figure. Arista has a long-term earnings growth expectation of 14.81%. It delivered an average earnings surprise of 11.82% in the last four reported quarters. Arista continues to benefit from the expanding cloud networking market, which is driven by the strong demand for scalable infrastructure.
Pinterest, Inc. PINS is set to release second-quarter 2025 earnings on Aug. 7. The Zacks Consensus Estimate for earnings is pegged at 34 cents per share, implying a growth of 17.24% from the year-ago reported figure. Pinterest has a long-term earnings growth expectation of 33%.
Pinterest is witnessing greater engagement on the platform from its existing user base. The company’s focus on improving operational rigor and incorporating sophisticated AI models to enhance relevancy and personalization is likely to bring long-term benefits.
InterDigital IDCC is scheduled to release second-quarter 2025 earnings on July 31. The Zacks Consensus Estimate for earnings is pegged at $2.77 per share. InterDigital delivered an earnings surprise of 160.15% in the trailing four quarters.
InterDigital’s global footprint, diversified product portfolio and the ability to penetrate different markets are impressive. Apart from the company’s strong portfolio of wireless technology solutions, the addition of technologies related to sensors, user interface and video to its offerings is likely to drive considerable value, considering the massive size of the market it licenses.
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This article originally published on Zacks Investment Research (zacks.com).
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