RALEIGH — Bandwidth, a communications technology services company, reported third quarter earnings that beat Wall Street expectations due to a one-time gain of income tax benefit. Revenue increased 22 percent year-over-year as well.
In other news, Bandwidth disclosed that company a cofounder has left the company’s board of directors.
The Raleigh-based company reported net income of $2.5 million, or 12 cents per share, in the quarter, compared to net income of $1.4 million, or 11 cents per share, in the third quarter a year ago, reports Jackson Liu for North Carolina Business News Wire.
Analysts surveyed by Zacks Investment Research were expecting a loss of 20 cents per share.
However, excluding the one-time gain of $4.2 million income tax benefit from option exercises, Bandwidth reported a non-GAAP net loss of $1.0 million, or 5 cents per share, in the quarter, compared to a non-GAAP net income of $2.2 million, or 15 cents per share, in the third quarter a year ago.
Revenue was $50.5 million, up 22 percent from revenue of $41.3 million in the third quarter a year ago.
“We continued our trend of surpassing expectations during the third quarter and delivered strong financial results. We grew CPaaS revenue 24 percent year-over-year and expanded customer relationships evidenced by our 117% dollar-based net retention rate,” stated David Morken, chief executive officer of Bandwidth, in a statement.
Bandwidth’s shares rose $4.92 to $54.49 in after-hours trading on Tuesday. The earnings were released after the market closed.
The company projects fourth-quarter revenue to be between $49.1 million and $49.6 million and full year revenue to be between $200.8 million and $201.3 million.
The company went public last year. In the four quarters since it has been a public company, it has beaten Wall Street expectations.
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.
Bandwidth cofounder leaves board
Earlier, Bandwidth disclosed that cofounder Henry Kaestner had resigned as a member of board as of Oct. 3.0
Luke Roush, a veteran communications executive, replaces him for a three-year term.
“Henry has made extraordinary contributions to Bandwidth since we founded the company together,” said David Morken, Chief Executive Officer of Bandwidth. “Henry has been instrumental in Bandwidth’s growth and the achievement of each of its objectives. While I am disappointed that Bandwidth and I will no longer benefit from Henry’s sage advice as a member of our Board, Henry always will remain a treasured friend.”
Bandwidth launched in 1999.