10-Q · July 29, 2026
Bandwidth delivered Q2 revenue of $219.897 million, up 22% year over year and 5% sequentially, and turned to $2.387 million of GAAP net income from a $4.931 million prior-year loss. Growth was broad-based across cloud…
BAND earnings analysis
10-Q · Filed October 29, 2026 · Our reading of the company's report
The latest report
Bandwidth delivered continued top-line growth, with revenue of $234.017 million up approximately 6.4% sequentially and 21.9% year over year, while non-GAAP EPS of $0.50 beat consensus by $0.08. Free cash flow improved…
Read full summary
Bandwidth delivered continued top-line growth, with revenue of $234.017 million up approximately 6.4% sequentially and 21.9% year over year, while non-GAAP EPS of $0.50 beat consensus by $0.08. Free cash flow improved to $32.981 million and liquidity was supported by $171 million of cash, $4 million of marketable securities and no Credit Facility borrowings. Offsetting positives are persistent gross-margin pressure, $323 million of gross carrying-value convertible debt, unhedged foreign-exchange exposure and expanded SI, regulatory and government-shutdown risks.
Gross and operating margin
How much of each revenue dollar the business keeps.
One point per quarterly or annual filing. Both margins are shares of that report's revenue.
How we read each report
Our analysis across the last few reports.
Our model's reading of each filing, not the share price or the market's reaction. Annual and quarterly reports each occupy one position.
Reported figures
- Earnings per share
- $0.5
What stood out
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Revenue growth continued and beat estimates
Revenue was $234.017 million, up from $220 million in 2026 Q2 and $192 million in 2025 Q3, representing approximately 6.4% sequential growth and 21.9% year-over-year growth. Revenue exceeded the $233.089 million consensus estimate by $0.928 million.
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Adjusted earnings and EBITDA strengthened
Reported non-GAAP diluted EPS was $0.50 versus the $0.42 consensus estimate, a $0.08 beat. The filing materials also reported adjusted EBITDA of $34.797 million, up 43% year over year.
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Cash generation improved
Free cash flow increased to $32.981 million, compared with $26 million in 2026 Q2 and $16 million in 2025 Q3. This indicates stronger cash conversion despite the absence of capex detail in the supplied 10-Q text.
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Liquidity remained substantial
At September 30, 2026, the company held $171 million of cash and cash equivalents plus $4 million of marketable securities. It had no outstanding borrowings under its Credit Facility, while gross carrying amounts of $7 million of 2028 Convertible Notes and $316 million of 2032 Convertible Notes remained outstanding.
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Share repurchases continued
The company repurchased 225,343 shares during the quarter for approximately $10 million based on the reported monthly purchases, and had repurchased approximately $30 million cumulatively under its $80 million authorization as of September 30, 2026.
What to watch
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Gross-margin compression
GAAP gross-margin pressure remains a concern: gross margin declined from 38.5% in 2025 Q3 to 35.7% in 2026 Q2 in the quarterly history provided. The filing also warns that inflation may compress gross margins and that international customers may carry lower margins.
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Convertible-note liquidity exposure
The company issued $316 million of 2032 Convertible Notes and had $7 million of 2028 Convertible Notes outstanding at September 30, 2026. Although the 2032 notes carry a 0% interest rate, future conversions or repurchases could require cash and adversely affect liquidity.
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Unhedged currency exposure
A hypothetical 10% adverse change in foreign-currency exchange rates would have reduced nine-month 2026 net income by approximately $4 million. The company does not currently hedge foreign-currency exposure.
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Emerging SI and regulatory risk
The filing adds or emphasizes risks from super intelligence, including agentic systems that may take unintended actions, and states that the European Union Artificial Intelligence Act may impose onerous obligations. The company also warns that employee use of unauthorized SI applications could transmit sensitive data to third-party platforms.
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Uninsured cash concentration
Nearly all operating cash is held in financial-institution deposit accounts that are not FDIC-insured. As of September 30, 2026, the company reported $171 million of cash and cash equivalents, creating potential access and counterparty risk if a bank defaults or experiences limited liquidity.
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Government shutdown exposure
The filing identifies government-shutdown exposure following the U.S. shutdown in October 2025, which delayed FCC reviews and filing deadlines. Future shutdowns could also impair access to capital markets and delay regulatory proceedings affecting the business.
Management's outlook
The 10-Q does not provide new quantitative guidance in the supplied filing text. Numeric 2026 outlook was provided in the October 29, 2026 earnings release: revenue of $905 million-$910 million and non-GAAP EPS of $1.73-$1.79; management also expects double-digit 2027 Cloud Communications revenue growth.
Earlier filings 4
10-Q · April 30, 2026
Bandwidth reported strong Q1 2026 results with a total revenue of $209 million, up 20% from $174 million in Q1 2025. The company reversed its previous losses, achieving a net income of $4 million compared to a net loss…
10-K · February 19, 2026
Bandwidth positions itself as a cloud communications provider anchored by an owned global network and an AI-first enterprise offering (Maestro) to capture AI voice and cloud migration demand. Revenue was roughly flat…
10-Q · October 31, 2024
Bandwidth reported Q3 revenue of $193,883,000, up $41,870,000 (+27.6%) versus Q3 2023, with gross profit of $73,134,000 (gross margin ~37.7%). The company narrowed operating loss to $(898,000) from $(6,147,000) a year…
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