Bandwidth stock falls 14% after earnings report
Raleigh’s Bandwidth Inc. shares declined 14% Thursday after the company announced it predicts a bigger fourth quarter loss and lower revenue than expected. Shares have declined about 50% since peaking at about $90 in September.
The communications platform-as-a-service company reported revenues of $60.5 million for the Sept. 30 quarter, compared with $50.5 million during the same quarter last year. Bandwidth lost $1 million, compared with a $2.5 million profit a year earlier.
For the fourth quarter, Bandwidth expects a loss of 15 cents to 17 cents per share, with revenue of about $58.5 million. Analysts had predicted a 14 cent loss and revenue of $66 million.
During the company’s earnings conference call, CEO David Morken said Bandwidth signed a deal to become the exclusive service provider for a “large Fortune 500 company,” who he didn’t name. The five-year agreement is expected to earn the company “tens of millions in committed revenue” and will make the enterprise one of its largest customers next year. The customer “agreed to significant exclusivity provisions regarding the vast majority of services that we provide to them.”
Bandwidth, which is based at Raleigh’s Centennial Campus business park, is one of the largest players in the fast-growing telecom sector that lets businesses communicate with customers instantly. An example service is getting a notification from a phone app such as a job recruitment response.
Bandwidth went public in November 2017.