Bandwidth Q4 Earnings Meet Estimates, Revenues Decline Y/Y

Bandwidth Inc. BAND reported relatively modest fourth-quarter 2025 results, with revenues marginally beating the Zacks Consensus Estimate and adjusted earnings meeting the same.    

In the quarter, the company's revenues declined slightly due to weaker messaging surcharges and the lack of political campaign revenues despite growth in cloud communications and software services. Its focus on large enterprise wins, AI-driven solutions, and stronger margins and cash flow are the positives.

Net Income

On a GAAP basis, net loss during the quarter was $3 million or a loss of 10 cents per share compared with a net loss of $1.8 million or a loss of 6 cents per share in the prior-year quarter. The decline was attributed to a net sales decline and higher operating expenses.
 
Excluding non-recurring items, non-GAAP net income during the reported quarter was $11.5 million or 35 cents per share compared with $11.6 million or 37 cents per share in the prior-year quarter. The adjusted earnings were in line with the Zacks Consensus Estimate.

For 2025, Bandwidth reported a GAAP net loss of $12.9 million or a loss of 43 cents per share compared with a net loss of $6.5 million or a loss of 24 cents per share in 2024. Non-GAAP net income for 2025 was $45.9 million or $1.43 per share compared with $40.9 million or $1.34 per share in 2024.

Bandwidth Inc. Price, Consensus and EPS Surprise

Bandwidth Inc. price-consensus-eps-surprise-chart | Bandwidth Inc. Quote

Revenues

Quarterly revenues declined to $207.7 million from $210 million in the prior-year quarter. Revenues declined primarily due to lower messaging surcharges and the absence of political campaign revenues. The top line beat the Zacks Consensus Estimate of $207.2 million. For 2025, revenues increased to $753.8 million from $748.5 million in 2024.

In the fourth quarter, Cloud communications revenues increased to $150.3 million from $144.1 million. Revenues from Messaging surcharges declined to $57.4 million from $65.9 million in the prior-year quarter.

Other Details

Non-GAAP gross profit aggregated $86.3 million compared with $83.4 million in the year-ago quarter, with respective margins of 57% and 58%. For 2025, non-GAAP gross profit increased to $326 million from $307.9 million in 2024, with respective margins of 58% and 57%. 

During the quarter, adjusted EBITDA increased to $24.8 million from $23.4 million in the year-ago quarter, with respective margins of 17% and 16%.

Cash Flow & Liquidity

In the fourth quarter, Bandwidth generated $38.6 million in cash from operations compared with $36.5 million in the year-earlier quarter. For 2025, the company generated $89.5 million of cash from operating activities compared with $83.9 million in 2024.

As of Dec. 31, 2025, it had $102.8 million in cash and cash equivalents with $247.6 million of convertible senior notes compared with respective tallies of $81.8 million and $281.3 million a year ago.

Outlook

For the first quarter of 2026, Bandwidth expects revenues in the range of $200-$203 million. Management currently forecasts adjusted EBITDA in the range of $21-$24 million, and non-GAAP earnings are expected to be in the band of 30-32 cents per share.

For 2026, the company expects revenues in the range of $864-$884 million, indicating around 16% year-over-year growth. Adjusted EBITDA is expected to be between $117 million and $123 million, suggesting 29% year-over-year growth, and non-GAAP earnings are expected to be in the range of $1.66- $1.74 per share.

BAND’s Zacks Rank

Bandwidth currently carries a Zacks Rank #4 (Sell). 

Stocks to Consider

Celestica Inc. CLS sports a Zacks Rank #1 (Strong Buy) at present. You can see the complete list of today’s Zacks #1 Rank stocks here.

In the last reported quarter, it delivered an earnings surprise of 8.62%. With rising demand for AI and cloud infrastructure, Celestica is well-positioned to benefit. Its focus on higher-margin markets, diversified portfolio, and strong engineering capabilities support scalable production of complex electronic and data-center solutions. Its strong research and development capabilities enable it to produce high-volume electronics manufacturing across multiple industries.

Ericsson ERIC carries a Zacks Rank #2 (Buy) at present. It delivered an earnings surprise of 17.39% in the last reported quarter.

Ericsson is likely to gain from steady global 5G investments. Its competitive 5G portfolio and disciplined cost focus support network leadership, while expanding enterprise and private-network offerings create new growth opportunities. The company continues to execute its plan to become a leading mobile infrastructure provider. Ongoing innovation and partnerships should further strengthen its position in the wireless infrastructure market.

Ubiquiti Inc. UI currently holds a Zacks Rank #2. It delivered an earnings surprise of 38.08% in the last reported quarter.

It offers a broad portfolio of networking solutions for enterprises and service providers. Its efficient and flexible business model supports healthy margins and scalable expansion. The company continues to invest in research and development to launch innovative networking products and advanced technologies. Strong channel management and a wide global distributor network improve demand visibility and inventory control.

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This article originally published on Zacks Investment Research (zacks.com).

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