RALEIGH – Bandwidth, the communications provider that went public in November, is on a roll, or as CEO David Morken explained to Wall Street analysts Wednesday evening: “We struck a chord.”

Bandwidth logo


Bandwidth stock set a new high of $35.89 on Wednesday ahead of earnings news that produced revenue “and earnings substantially higher than Wall Street expectations.

“[I]t would seem like, you are just adding a lot of customers having a higher amount per customer and getting more retention,” one analyst said to Morken in a conference call. “It just seems like a lot’s going your way right now in the first three months of the year?”

Morken, who cofunded the Triangle-born startup and led it to an IPO in November, agreed.

“I think that’s a fair overview. Our customers on average are spending $150,000 with us and that’s consistent with our past, so there is no significant change in that, and we are adding more customers, as we noted. So I think you are generally, directionally correct,” he replied.

The numbers reflect that conclusion.

The company reported $53 million in revenue while analysts polled by Zacks forecast $47 million.

Bandwidth (Nasdaq: BAND) revenue surged 34 percent year-over-year in the first quarter ending March 30. It posted net income of $6.2 million, or 30 cents per share. Analysts had expected 8 cents, reported North Carolina Business News Wire.

“During the first quarter, we struck a chord in the market, as we surpassed the 1,000 total enterprise customer milestone,” Morken told analysts. “This represents a 26% year-over-year growth in active CPaaS [Communications Platform as a Service] customers, who on average, spend more than $150,000 with us each year. We continue to see balanced revenue growth from a broad and diverse set of customers across all our services.”

He also discussed continued hiring, plans for international expansion, and much more.

‘Outstanding start’

In the earnings announcement earlier, Morken declared:

“The first quarter was an outstanding start to 2018 driven by robust enterprise demand to embed voice, messaging and 911 into software applications.

“Our better-than-expected results were driven by enterprise customers continuing to grow and innovate with our platform.  We believe that Bandwidth is uniquely positioned to capitalize on our multi-billion-dollar market opportunity due to the versatility of our cloud-based software platform coupled with the reliability of an owned nationwide IP [Internet Protocol] voice network.”

Shares slipped from the new high to close the day at $35.06 just ahead of the earnings results but were still up more than 9 percent. The stock has nearly doubled in price since hitting a low of $18.05 in early December.

Bandwidth went public on Nov. 9 at $20 a share.

Bandwidth’s revenue included $6.3 million in a legal case involving Verizon.

Its primary revenue earned through Communications Platform as a Servicegrew to $38.9 million year-over-year.

Bandwidth also reported that the number of its CPaaS customers climbed to 1,028.

Looking ahead, Bandwidth forecasts total revenue for the current quarter at between $45.1 million and $45.6 million, which is slightly below the average analyst estimate of $46.3 million, NCBNW said..

NCBNW’s Chris Roush added that Bandwidth estimated 2018 revenue above analyst expectations.

The company projected that its revenue for the year would be between $193.1 million and $194.6 million. The current Wall Street expectation is for revenue of $189.1 million, Roush noted.

Companies such as Google, Microsoft, and Ring Central use Bandwidth’s APIs to embed voice, messaging and 9-1-1 access into software and applications.